Further Reflection on Infinera (INFN) Leads MKM Partners to Cut PT to $24

Following further reflection MKM Partners decided to maintained a Buy rating on Infinera Corp. (NASDAQ: INFN), and cut the price target to $24.00 (from $27.00). There may be more hand-wringing over the next month, but the setup into earnings is actually shaping up favorably, in MKM's view. Results and guidance should be strong relative to investors' worries. MKM reiterated INFN as their top 2016 pick for growth investors.

Analyst Michael Genovese commented, "We remain confident 4Q15 earnings should be positive for the stock, but we are lowering 2016 forecasts for several reasons. First, the stock is down 20% over the past two weeks (vs. NASDAQ -4%) reflecting increased investor concerns over revenues following Ciena's (CIEN) less than expected outlook. With the stock already discounting lower numbers, we think it is appropriate to lower the bar. Secondly, we are reducing our 1Q16 sales estimate from flat q/ q ($258mn) to down 5% ($246mn) to reflect typical soft 1Q seasonality for the industry. Finally, we are bringing our 2016 R&D expense estimate closer to management's guidance of 20% of revenues. This is the primary reason our 2016 EPS forecast falls to $1.00 from $1.13."

For an analyst ratings summary and ratings history on Infinera Corp. click here. For more ratings news on Infinera Corp. click here.

Shares of Infinera Corp. closed at $18.08 yesterday.

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