Radware (RDWR) shares are trading lower this morning after Oppenheimer analyst Ittai Kidron cut his rating on the stock to Perform from Outperform, following the company’s recent spike on an Israeli press report that asserted the networking systems company was in talks to be acquired by IBM (IBM) or Hewlett-Packard (HPQ).
“M&A speculation aside, we believe Radware’s shares at current levels are overextended and we’re stepping to the sidelines,” he writes in a research note. “While Radware could be a takeover target, we have no visibility on whether the recent speculation will materialize. No announcement has been made by management, and rather than relying on guesswork, we focus on Radware’s fundamentals. We’re not seeing a slowdown in Radware’s business, and its strong growth drivers remain intact. With that said, Radware’s shares have appreciated significantly, and we think investors should opt to take the more conservative route and lock in gains. We would revisit Radware at a more attractive entry point.”
RDWR is down $1.50, or 4.3%, to $33.20.
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