After Seagate (STX) issued a profit warning for Q3, UBS analyst John Roy said investors were already expecting this fiscal year to be weak, but that estimates for next year are now starting to get impacted as well. Roy cut his already significantly-below consensus FY17 EPS view to $2.75 from $2.97, lowered his price target on the stock to $22 from $24 and reiterated a Sell rating. Roy also said the read-across from Seagate's report is negative for enterprise HDD storage, particularly for NetApp (NTAP), which is most exposed. EMC's (EMC) fundamentals could "be hit some" and weakness in the enterprise could slow Nimble Storage's (NMBL) progress in that "new-for-them" market, Roy added.

Bearish flow noted in NetApp with 1,299 puts trading, or 2x expected. Most active are 4/26 weekly 98 puts and 4/26 weekly 97 puts, with total volume in those strikes near 830 contracts. The Put/Call Ratio is 2.39, while ATM IV is up over 1 point on the day. Earnings are expected on May 30th.