What the bad jobs report means for markets
Investing.com -- Citi analysts said they expect Arista Networks (NYSE:ANET) shares to outperform over the next three months, driven by likely upward revisions to the company’s second-half and full-year outlook when it reports June-quarter results on Aug. 5.
“We are opening a positive catalyst watch on Arista as we believe shares will outperform with positive revisions to the company’s 2H outlook,” Citi wrote.
“Arista is expected to provide Sep-Q guidance and an updated FY25 outlook… we anticipate an increase to the company’s outlook for 17% topline growth Y/Y to drive upward revisions to 2H consensus for 15% topline growth Y/Y,” added the bank.
Citi raised its full-year 2025 revenue forecast for the company to $8.6 billion, up 23% year over year, citing Arista’s strength in the front end and improving trends in data center switching.
“We remain constructive on hyperscale data center capex and see upside to 2H/FY25 as ANET benefits from an expanding Ethernet switching TAM,” the firm said.
For the June quarter, Citi projects revenue of $2.1 billion, in line with guidance and consensus, with EPS of $0.65. Analysts noted that “management guided to a specific point for sales instead of the typical range, to reflect their confidence.”
Citi also lifted its FY25/26 EPS forecasts by 4% and 5%, respectively, and increased its price target on Arista shares to $123, based on a 39x multiple of FY26 earnings.
“As we shift from defense (1H) to offense (2H), ANET is our top-ranked stock,” Citi wrote, reiterating a Buy rating and highlighting Arista’s exposure to a resilient and expanding data center switch market.