Piper Jaffray Reiterates Neutral on Blue Coat Systems, Reduces PT to $22

Piper Jaffray reiterated its Neutral rating on Blue Coat Systems (NASDAQ: BCSI). At the same time, Piper Jaffray reduced its price target from $27 to $22 as the company still struggles to turn the corner.

In a research report published today, Piper Jaffray states, "Expectations were relatively low for Blue Coat as the company recently issued downwardly revised April quarter guidance, but worse than expected FQ1 guidance caused shares to sell off in the aftermarket. After three full quarters under new leadership, the 6-9 month turnaround plan has yielded little results and the company now expects FY12 to be another "year of transition." Blue Coat still has well respected technology and a variety of new product cycles, but sales execution remains the biggest underlying issue. Arguably, the company is attractive at these levels as a turnaround or takeout play, but we would shy away from owning shares until product sales resume growing. As a result, we are reiterating our Neutral rating on shares of BCSI and lowering our price target to $22 from $27."

Blue Coat's shares are having a rough time in recent trading. On Thursday, its shares tumbled 4.12% to close the day at $22.36. Blue Coat continued to plummet in today's pre-market trading, losing 6.8% to currently trade around $20.84.