By Sam Boughedda
Investing.com -- NetApp Inc (NASDAQ:NTAP) stock fell 2% during Thursday's session after BofA analyst Wamsi Mohan downgraded it to neutral from buy, trimming the price target to $96 from $100.
The analyst said in a note to clients that they attended NetApp's 2022 Investor Day, and while they are confident in NetApp management's strong execution, the investment required for growth will prevent the company from "realizing operating leverage which, in turn, will limit upside in shares from current levels."
NetApp shares are down 7% for the year-to-date.
"We see risk/reward balanced," said the analyst, adding that the upside to long-term public cloud annual recurring revenue and revenue targets is balanced by risk introduced from additional investments.
Mohan added that the company has the option to scale back investments if growth does not materialize, but the "resultant slower growth would also limit upside for shares."