Cloud stock NetApp could gain 20% from here: Stifel

Shares of NetApp Inc (NASDAQ: NTAP) haven’t done all that well over the past two months but a Stifel analyst is convinced that it’ll be a different story moving forward.

NetApp stock could climb to $75 a share

On Monday, Matthew Sheerin upgraded the cloud stock to “buy” and said its shares could climb to $75 – up roughly 20% from here. His bullish call arrives shortly after meetings with the company’s management.

We came away from the meetings more confident in our fiscal year 2024 estimates, $5.49, which reflects a soft first half but a return to sales and earnings per share growth in second half of 2024.

In February, the Nasdaq-listed company reported better-than-expected earnings for its third financial quarter. Its revenue, though, cam in shy of estimates.

At writing, NetApp stock is down 6.0% versus its year-to-date high.

NetApp is attractive on company-specific initiatives

Earlier this year, NetApp said it will lower its global headcount by 8.0%. The planned reorganization of its sales strategy, Sheerin noted, will also help it navigate the market headwinds.

Other reasons cited for the constructive view on NetApp stock include improved hardware supply that the analyst expects will help boost margins moving forward. His research note also reads:

We view the current risk-reward set up as compelling as NTAP continues to expand its product portfolio and believe the current valuation gives the company little credit for its company-specific initiatives.

Remember that “NTAP” is a dividend stock that currently pays a yield of just over 3.0% which makes up for another good reason to invest in it.