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Canaccord Adams analyst Paul Masnky today cut his rating on Brocade (BRCD) to Hold from Buy, cutting his price target on the stock to $8.50 from $10. The move comes amid a sell-off in the shares on disappointment with the company results for the fiscal fourth quarter ended October and its outlook for the October 2010 fiscal year. Adding to the pressure, Brocade today also denied previous reports that it had put itself up for sale.

Brocade Communications (BRCD) CEO Michael Klayko told investors on a post-earnings conference call that it is not true that the company has been seeking a buyer, Reuters reports. That contradicts a story in the Wall Street Journal last month which said that Brocade had “quietly put itself up for sale.”

“That is just false,” he said, when asked about the reports.

BRCD, which late yesterday reported Q4 results and FY 2010 guidance that left the Street wanting more, is down 48 cents, or 6.2%, to $7.32.

Brocade (BRCD) late Monday posted results for its fiscal fourth quarter ended October 31 that slightly edged Street estimates. Revenue of $521.8 million was a tad ahead of the Street at $521.1 million; non-GAAP EPS of 15 cents a share was two cents ahead of the Street consensus.

For the first quarter, the company sees revenue up 4%-5% sequentially, which it said is below normal seasonal growth of 6%-8%. That would imply revenue of $542.6 million to $553.1 million; the Street has been looking for $549 million.

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Last night’s surprising news that Hewlett-Packard (HPQ) is buying 3Com (COMS) for $7.90 a share has sent far-reaching ripples through the networking equipment sector. The Street sees largely negative ramifications for other players in the industry, and they fall into three categories.