Piper Jaffray Remains Bullish on Finisar (FNSR) Ahead of 1Q Report
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Piper Jaffray reiterated an Overweight rating and $24.00 price target on Finisar (NASDAQ: FNSR) ahead of the company's 1Q earnings report. Piper Jaffray recently held meetings with the company and believes that estimates remain conservative. For the upcoming July quarter, the Street is calling for FNSR’s Datacom revenues to grow 1.2% sequentially, but on average, the optical group’s Datacom business grew ~9.0% Q/Q in the June quarter.
Analyst Troy Jensen commented, "Finisar is scheduled to report FQ1 results after the close on Thursday, September 8th. Given the better-than-anticipated demand the optical component companies experienced within their Datacom and Telecom businesses during the June quarter and the upbeat investor meetings we recently hosted with these same companies, we believe Finisar’s estimates are too conservative and expect the company to exceed consensus expectations. In addition, with the 2nd wave of China tenders expected to be awarded in 2H16, coupled with the 100G Datacom and Verizon Metro build-out ramp, we do not believe Street estimates are reflecting the true potential of these large catalysts and anticipate Finisar to guide FQ2 revenues above the Street. We also continue to view Finisar’s FY17 estimates as extremely conservative, and see meaningful estimate revisions as the 100G cycle ramps. We are reiterating our OW rating and $24 price target."
Shares of Finisar closed at $22.32 yesterday.
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