Deutsche Bank On NetApp: Environment Still 'Challenged'

NetApp Inc. (NASDAQ: NTAP) reported its second quarter results on Wednesday after market close.

Sherri Scribner of Deutsche Bank reviewed NetApp's quarterly results in a note to clients on Thursday.

"The company did a good job of improving gross margins in the quarter and modestly raised full-year gross margin expectations," Scribner wrote. The analyst adds that despite gross margin improvements and positive outlook, branded revenue growth is expected to be modestly lower than prior guidance of mid-single digits due to a difficult macro environment and foreign exchange headwinds.

Scribner is projecting NetApp to report $6.3317 billion in revenue in 2015, $6.50 billion in 2016 and now introduced a 2017 sales estimates of $6.675 billion.

Scribner sees NetApp's growth as "challenged" due to secular headwinds in IT. As such, shares were reiterated with a Hold rating with an unchanged $40 price target.

NetApp is down 2.8 percent at $41.11.