JPMorgan sees ‘ample upside’ in Arista Networks after selloff

JPMorgan analyst Samik Chatterjee reiterates an Overweight rating on Arista Networks with a $200 price target. The shares are down 11% over the past month as investors are growing increasingly worried about the slowdown in momentum into 2024 given the recent run-rate of growth, the analyst tells investors in a research note. The firm says Arista’s shares are trading at a 26-times next 12 months price-to-earnings multiple relative, well below its peak multiples of 35-times. JPMorgan sees “ample upside from the shares” as it looks for the combination of earnings upside beyond 2024 from the ramp in artificial intelligence spend as well as a re-rating closer to the high end of the historical trading range supported by the company’s annual earnings north of mid-20% beyond 2024.