JDSU: UBS Ups to Purchase on Second-Half Component Rebound
Shares of fiber optic component maker JDS Uniphase (JDSU) are up 11 cents, or 1%, at $10.92, after UBS Securities’s Nikos Theodosopoulos raised his rating on the shares to Buy from Neutral, while maintaining his $14.50 price target, writing that a recent calcite in the stock has made valuation “attractive,” and that he expects a ramp-up in telco spending in the latter half of this year.
That could boost the optical component market:
In our analysis of the optical component market we find that it has now under shipped its systems end market for 4-5 quarters, having declined 16% during that period [...] As inventories have been mostly worked through, we believe continued under shipment of the end mkts is not sustainable long term. We note that we est CCOP growing 18% in 2013.
As for JDS, estimates for it on the Street for the September quarter, with just 2% growth, quarter to quarter, predicted, are among the lowest for any company in the field, he writes.
“We think this year may be different given the second-half spending ramp which will begin in the September quarter and that numbers might be too low for 2012.”
Theodosopoulos is modeling $1.67 billion in revenue this year and 56 cents EPS, and $1.86 billion and 85 cents next year.