Investment house Needham downgraded network switching company Extreme Networks (EXTR

) stock to hold from buy due to valuation and raised the price target on the stock to $36, up from $35. Analyst A.A. LaFountain said the company is well positioned to benefit from expansion of gigabit Ethernet into metropolitan area network markets, providing a low-cost product for that segment.

LaFountain noted the development of the company's next-generation 10 GigE will likely enhance long term outlook. The stock has reached levels above his $35 target. The analyst sees earnings per share of $0.31 in fiscal year 2001.

Shares of Extreme Networks were down 4-1/8 at 41-3/8.