UPDATE: Jefferies Initiates Coverage On NetApp

In a note dated October 9, Jefferies analyst James Kisner initiated coverage of NetApp Inc. (NASDAQ: NTAP) with a Hold rating and a $45 price target.

Kisner commented, "NetApp is not as well-positioned to address longer term cloud trends and is the most at risk to lose share to new entrants in the storage market."

Having said that, Kisner noted investor appear to be largely aware of the downside and competitive risks. He also noted the company should benefit from a positive medium-term backdrop in storage, as well as the recent refresh of its product line.

Additionally, Kisner believes NetApp's strong cash position and the frequent speculation of the company as a take over target will mitigate some of the downside risk. However, he does not feel a takeover is likely.

At last check, shares of NetApp were trading about 1 percent lower in Friday's market session.