KeyBanc raised the firm’s price target on Arista Networks to $217 from $206 and keeps an Overweight rating on the shares on higher estimates post a beat/raise Q2 report. The firm’s price target represents 24-times 2024 EBITDA, which is a 20% premium to the three-year historical NTM average multiple, which it views as warranted provided the company’s expanding opportunity with both Cloud Titans/CSPs and Enterprise including AI-related expansion long-term to Arista’s addressable markets. Further, KeyBanc continues to view Enterprise as Arista’s incremental growth engine, which it believes could rival the Cloud Titan segment in the second half of 2023 in terms of percentage of revenue.
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