J.P. Morgan analyst Mark Moskowitz downgrades Brocade (NASDAQ:BRCD), QLogic (NASDAQ:QLGC), Seagate Technology (NASDAQ:STX), Lexmark International (NYSE:LXK), and Xerox (NYSE:XRX) based on the belief the IT spending will be decreasing, with the biggest cuts coming early next year. The analyst forecasts that the revenue and profit estimates for each of these companies will be declining in 2012.
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“Our research indicates that CIO budgets already have come under pressure, and we expect this dynamic to worsen,” Moskowitz wrote. He also asserts that the stocks for these companies have not yet adjusted to his unfavorable forecasts.
The analyst does still recommend Apple (NASDAQ:AAPL), IBM (NYSE:IBM), NetApp (NASDAQ:NTAP), and EMC (NYSE:EMC) for those looking to invest in the IT industry. “Apple is the only stock in our coverage list where we expect both revenue and EPS estimates to have upside potential in the next 3-6 months,” he writes.