Nomura Instinet analyst Jeffrey Kvaal downgraded Arista Networks to Neutral from Buy and lowered his price target for the shares to $230 from $290. The low-single-digit webscale growth Arista cited as part of its "cautious" second half of 2019 guidance "is likely an overly prudent figure in the long term," Kvaal tells investors in a research note. The company's recovery, however, "may be a protracted one," adds the analyst. Kvaal says Arista faces difficult comps in the first half of 2020 and possible webscale share loss in the second half of the year. He believes his "below-consensus" estimates no longer support a mid-20s price-to-earnings valuation multiple.

Bullish option flow detected in Arista Networks with 2,900 calls trading, 1.7x expected, and implied vol increasing almost 2 points to 56.57%. Nov-24 270 calls and 4/26 weekly 275 calls are the most active options, with total volume in those strikes near 770 contracts. The Put/Call Ratio is 0.64. Earnings are expected on May 7th.