Network Appliance Eating Into Backlog To Hit Numbers?

Network Appliance (NTAP) shares are losing ground today after Caris & Co.’s Shebly Seyrafi cut his rating on the stock to Above Average from Buy, and reduced his price target to $28 from $35. Seyrafi says the move reflects “weak channel checks” for its fiscal second quarter ending October, as well as concern about a “weaker than expected ramp” of its FAS 2000 storage arrays, and “weakness in the financial vertical.”

He says the company “may be eating into backlog to make its revenue guidance” for the quarter.

Seyrafi cut his EPS estimate for the January 2008 fiscal year to $1.09 from $1.12; for ‘09 he goes to $1.44, from $1.53.

Network Appliance today is off 35 cents, or 1.3%, to $25.98.