MKM Partners Raises Price Target on Finisar (FNSR) Ahead of 2Q
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MKM Partners reiterated a Buy rating on Finisar (NASDAQ: FNSR), and raised the price target to $37.50 (from $35.00), ahead of the company's 2Q earnings report. MKM is expecting the company to report strong results, above the consensus estimates.
Analyst Michael Genovese commented, "Finisar is scheduled to report 2QFY17 (October) on Thursday, December 8 after the close. We expect a strong report with likely upside to our above-consensus $367mn (+14% y/y, +7% q/q) revenue, 34.0% GMs and $0.47 EPS forecasts. The 3QFY17 guidance should also be strong because demand is robust and the annual price declines are looking much more gentle this year versus prior years, according to our checks. The company should be able to guide revenues at least to consensus at $377mn (+22% y/y, +4% q/q). Also, GMs could be up sequentially again, versus consensus flat at 34.0%, even with one month of annual price declines in the January quarter. We are leaving our estimates unchanged, and increasing our price target to $37.50 from $35 based on 17.5x FY18E EPS plus net cash (up from 16x). We think there is potential upside to the valuation to the extent that estimates move up after the report."
Shares of Finisar closed at $33.97 yesterday.
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