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Ruckus deal done, Brocade +5% amid price target bumps

  • With its acquisition of Ruckus Wireless behind it as of Friday, Brocade Communications (NASDAQ:BRCD) is up 5% and Goldman Sachs has raised its price target.
  • The firm raised to $10, from $9, implying another 11% upside from today's price, though Goldman maintained a Neutral rating.
  • It sees EPS dilution in the short term as Brocade makes incremental opex investments to sell the new portfolio (fiscal 2016 EPS lowered to $0.92 from $0.98). But it sees accretion for 2017 above the company's target of $0.08-$0.12: Goldman expects $0.14 accretion and raised its 2017 EPS target to $1.13 from $0.99.
  • It also boosted EPS estimates for fiscal 2018 to $1.23 from $1.02.
  • After the deal closing, BMO Capital Markets also raised its price target on Brocade, to $9 from $8. That firm maintains a Hold rating on the stock as well.

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BRCD--
Brocade Communications Systems, Inc.