NetApp (NTAP) is scheduled to report results of its fiscal second quarter after the market close on Wednesday, November 13, with a conference call scheduled for 5:30 pm ET. What to watch for: 1. GUIDANCE: Along with its last report, NetApp guided for Q2 adjusted earnings per share in the range of 91c-99c on revenue of $1.325B-$1.475B. At the time, analysts were expecting the company to report Q2 EPS of 90c on revenue $1.36B, but those figures have since risen to 94c and $1.38B, respectively. In addition, NetApp in its last report guided for fiscal 2020 revenue to decline 5%-10% year-over-year. At the time, analysts saw the company reporting FY20 revenue of $5.69B, but that figure has since fallen to $5.65B. 2. MS UNDERWEIGHT: In late September, Morgan Stanley analyst Katy Huberty said her early channel checks at the time suggested broad demand for storage was weaker quarter-over-quarter, which led her to believe that NetApp and other storage vendors are likely to miss sales expectations at value-added resellers, or VARs, in the third calendar quarter. Huberty said at the time that her checks with VARs additionally indicated that performance with NetApp weakened incrementally and the level of discounting increased quarter-over-quarter. The analyst reiterated an Underweight rating and $41 price target on NetApp in the research note. 3. GS DOWNGRADE: In mid-October, Goldman Sachs analyst Rod Hall double downgraded NetApp to Sell from Buy and cut his price target on the shares to $45 from $61, saying that the company’s guidance is “optimistic” in an environment where large enterprise spending appears to be deteriorating further. The analyst added at the time that the company’s FY20 revenue guidance implies a recovery in core product revenue growth despite the slowdown in July. Hall also noted that his firm’s analysis indicates large enterprise spending is likely to continue to decline in the midst of ongoing trade and economic uncertainty. 4. LONGBOW RAISES ESTIMATES: Last week, Longbow analyst Nikolay Todorov maintained a Neutral rating on NetApp and raised his EPS forecast for the company’s Q2 to the mid-point of guidance, which he noted was ahead of consensus, after a better than anticipated uptick in server and storage spending pointed to in his quarterly IT reseller checks. The analyst added that while sales cycles remain elongate, resellers are forecasting a seasonal pickup in spending in the calendar fourth quarter, driven by an end of year budget flush.