MKM Partners Reiterates Buy on Oclaro (OCLR) - PT to $11
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MKM Partners reiterated a Buy rating on Oclaro (NASDAQ: OCLR), and raised the price target to $11.00 (from $10.00), following the company's 1Q earnings report. Revenues grew 8% sequentially to $136mn, which was $4mn above estimates. EPS came in at $0.14, or four-cents per share better than estimates.
Analyst Michael Genovese commented, "OCLR shares have been volatile recently, but its business has been consistently and resoundingly strong. The company delivered modest revenue upside but a big GMs/EPS beat in 1QFY17, and offered very strong 2QFY17 revenue and margins guidance. Total year-over-year revenue growth came in at 55% in 1QFY17, up from 52% in 4QFY16, and the 2QFY17 guidance implies it should accelerate to ~60%. The company's top line opportunity appears to be gated more by capacity than by demand for at least the remainder of FY17, and likely all of CY17. We are reiterating our Buy rating, and top pick status, on OCLR based on its opportunity to rapidly grow revenues and margins selling 100G components into China, 100+G coherent modules into Metro and DCI applications and 100G short-reach modules to Hyper Scale Data Center operators."
Shares of Oclaro closed at $7.34 yesterday.
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