Arista Networks (ANET.N): Arista Strikes Back - Raising TP to $215

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05 Aug 2026 06:12:05 ET │ 17 pages

Arista Networks (ANET.N)

Arista Strikes Back - Raising TP to $215

CITI'S TAKE

Better component supply, amidst sustained high-levels of demand, drove

upside to Jun-Q results and a $1.1B/ 10% increase in ANET's FY26 sales

outlook. While ANET's targets for AI sales ($3.5B) and Campus ($1.25B)

are unchanged, management's updated +40% FY26 growth outlook

includes confidence those numbers will go higher. While industry-wide

supply chain challenges are expected to persist through at least 2028,

ANET's investments in supply chain and factory efficiency are yielding

improved capacity. Favorable mix and tariff rebates contributed to GM

upside while continued OpEx discipline resulted in materially stronger

profitability. We raise FY26/27 EPS by 20%/24% on higher sales and

improved OpMgn. Our TP shifts to $215 on an updated 36x (3-year

average; vs 41x previously) target multiple of 2028 EPS power to reflect

lower market multiples. Maintain Buy.

Scale-Up Opportunity — Management expects the scale-up opportunity to

contribute more meaningfully in 2027 than in 2026. Visibility remains limited for

next year, so they are not projecting a major contribution in 2027 but the

opportunity becomes materially larger over the following two years. ANET is not tied

to a specific SU standard and will support what customers prefer, noting customer

interest around Ethernet-based approaches (ESUN/Ethernet

standards). While NVLink remains the dominant solution today, with adoption

of alternative XPUs (including AMD) customers may increasingly favor open

standard solutions like Ethernet, which could eventually evolve toward UALink or

ESUN-type architectures.

Buy

Price (04 Aug 26 16:00)

US$190.51

Target price

US$215.00↑

from US$173.00

Expected share price return

12.9%

Expected dividend yield

2.4%

Expected total return

15.2%

Market Cap

US$239,891M

Atif MalikAC

Adrienne Colby

Supply Chain — Management believes it has gained better control over previous

supply constraints, particularly around DRAM and TSMC-related bottlenecks. ANET

has intensified its multi-sourcing strategy and secured a fair share of constrained

supply.…