EMC rises as NetApp falls after Goldman report

AP News
Posted: Dec 18, 2009 1:27 PM

Shares of data storage company EMC Corp. rose while rival NetApp Inc. traded lower Friday after Goldman Sachs replaced NetApp with EMC on its Americas "Buy" list.

In a client note, Goldman analyst David Bailey said NetApp is still likely to benefit from improving demand for information technology. But the company's stock had risen 37 percent since it was put on the "Buy" list Sept. 20 and Thursday's close. He cut the company to "Neutral."

NetApp shares fell 62 cents, or 1.8 percent, to $33.21 in afternoon trading, while EMC rose 36 cents, or 2.1 percent, to $17.22.

Bailey said NetApp, which is based in Sunnyvale, Calif., and EMC, based in Hopkinton, Mass., should both see "an outsized benefit" from pent up demand for IT hardware, but EMC's operating margin is likely to expand faster.

He sees the trend driven by higher revenue, cost cutting and a better mix of products.