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09/01/14 04:21:49 PM
WORD ON THE STREET

Abercrombie & Fitch Co., Splunk, Inc., EMC Corporation

Abercrombie & Fitch Co.(ANF) : Abercrombie & Fitch (NYSE: ANF) shares are off nearly five percent after it posted disappointing second-quarter sales earlier this week and some analysts questioned its prospects. "The number-one fear that prevents investors from owning Abercrombie is concern that the brand is becoming irrelevant," Macquarie's Liz Dunn said in a note Friday maintaining a Neutral rating and $45 target. So on Thursday, Chief Executive Michael Jeffries, said the company is "looking to take the North American logo business to practically nothing." Although logo sales have recently fallen considerably, UBS' Roxanne Meyer sees a downside to de-emphasizing the segment in an increasingly crowded fashion market place. Meyer fears that "Abercrombie will become less differentiated versus other global fast fashion retailers, Meyer said in a note maintaining a Neutral rating and $40 target. And with total U.S. denim sales down six percent last year, Meyer thinks Abercrombie's current plan to make the category a centerpiece of its fashion lineup is "risky." But Oppenheimer's Anna Andreeva maintained a Buy rating and $50 target Friday, calling Abercrombie "one of our favorite names." Andreeva's modeling a same-store sales decline of three percent to four percent in the third quarter, but raised her 2015 earnings estimate to $2.35 from $2.25 a share, citing lower operating costs. Abercrombie closed Friday at $41.80, nearly unchanged. 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



Splunk, Inc.(SPLK) : After posting a strong beat on earnings Thursday, shares of Splunk(NASDAQ: SPLK) are trading up Friday. Summit Research has reiterated its Buy rating and maintained its $55 price target. Analyst Srini Nandury noted that "Splunk now has beaten the mid-point of guidance by an average of 9.2 percent during each of the last nine quarters by an average of $6 million or 9.2 percent." Thanks to new applications and new use cases along with investment in R&D, Splunk's momentum is expected to maintain upward velocity. After a conversation with management, Summit says it is "increasingly confident Splunk is rapidly becoming a platform for unstructured data, akin to Oracle/MS-SQL server platforms." Aside from Splunk's sticky ecosystem, its "plethora of applications being built but its customers" will make it difficult for other companies to displace the tech company's ecosystem. Key takeaways from the quarter according to Summit: Shares of Splunk were up 18.5 percent nearing Friday's close. 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



EMC Corporation(EMC) : In a note Thursday, Longbow Research published its mid-third quarter survey of IT storage resellers, which reflected additional signs of optimism. In particular, the firm focused on EMC(NYSE: EMC) and Network Appliance (NASDAQ: NTAP). Key takeaways: EMC (Buy) "EMC should benefit from the macro uplift, particularly the ongoing improvement for large infrastructure deals. - We are raising our EMC sales forecasts primarily in 4Q, to reflect the stronger outlooks at the reseller base. We added ~$100M of sales to our model, and now forecast +3.0% sales growth for EMC storage. Our EPS forecast is unchanged at $1.92." Network Appliance (Neutral) "We rate NTAP NEUTRAL, admittedly having missed an upgrade opportunity when our July reseller checks called U.S. Federal upside (confirmed by NTAP 1Q). Today at 13.5x forward earnings, we prefer to wait for a better entry point." 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



 

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