J.P. Morgan: NetApp Trumps EMC

J.P. Morgan has cut its opinion for EMC and boosted its recommendation for EMC's smaller competitor NetApp.
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NEW YORK (TheStreet) -- J.P. Morgan has cut its opinion for EMC (EMC) to neutral from overweight and boosted its recommendation for EMC's tinier competitor NetApp (NTAP) - Get Report to overweight from neutral.

The price target for EMC was reduced by a dollar to $21, while the price target for NetApp was lifted to $41 from $36.50.

J.P. Morgan analyst Mark Moskowitz said that EMC's upside potential could be limited by the stiffer competition in virtualized environments and shifts to midrange products; on the other hand, these shifts to midrange products could be beneficial to NetApp for the rest of this year and the next, according to the analyst.

In addition, NetApp's rising clout in the virtualization environment and strengthening direct and indirect sales channels will also contribute to the company's revenue growth potential of 20% or more, the analyst says.

Virtualization increases computer hardware efficiencies, allowing businesses to achieve cost savings.

NetApp has fallen more than 1% to $32.07, while EMC has tumbled 3.4% to $17.44 Tuesday morning.

Declines were seen across the major stock indices Tuesday, with the Dow down 188 points, as the markets' euro zone anxieties failed to subside.

-- Reported by Andrea Tse in New York

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