Analysts Selectively Bullish on SANs: Page 2 of 2

The firm initiated coverage of Brocade Communications Systems Inc., Emulex Corp., McData Corp., QLogic Corp., Quantum Corp., and Veritas Software Corp. Here are some highlights:

• Brocade Communications Systems Inc. (Nasdaq: BRCD):
  DB Alex Brown initiated coverage with a Buy rating and a 12-month price target of $40 a share. The firm expects Brocade shares to outperform the market by at least 10 percent over the next 12 months. But the analysts say Brocade's success will hinge on its ability to execute on its Silkworm 12000 core switch technology, expected by year-end.
• Emulex Corp. (Nasdaq: EMLX):
  Received a Market Perform rating, with a 12-month price target of $28.
• McData Corp. (Nasdaq: MCDT):
  Got a Market Perform rating and a price target of $20, but DB Alex Brown is erring on the side of caution with this stock, noting: Several parts of the story create more risk than reward at this point." The competitive situation is getting tougher, Ricci maintains, with Brocade moving towards the data center and per-port pricing continuing to fall, both of which put pressure on McData.
• QLogic Corp. (Nasdaq: QLGC):
  Also given a Market Perform rating with a price target of $47.
• Quantum Corp. (NYSE: DSS):
  The disk drive maker was given a Buy rating and a 12-month price target of $11 a share.
• Veritas Software Corp. (Nasdaq: VRTS):
  Received a Buy rating and a 12-month price target of $45 a share. "This company is in an enviable position, as a leader in a high-margin business (backup, recovery and file management software) in a long term growth sector (storage)."

At close of market Friday, Brocade shares were trading at 30.26, up 0.31 (1.14%). Emulex shares were trading at 27.86, up 1.48 (5.61%). McData shares were trading at 18.80, up 0.48 (2.62%). Qlogic shares were 46.00, up 1.72 (3.88%). Quantum shares were 9.26, up 0.01 (0.11%). Veritas shares were 35.42, up 0.24 (0.68%).

— Jo Maitland, Senior Editor, Byte and Switch
http://www.byteandswitch.com