ARGUS Reiterates 'Buy' Rating on Focus List Selection JDS Uniphase (JDSU) - Price Target $18

August 25, 2008 3:48 PM EDT

ARGUS reiterates a 'Buy' rating on Focus List selection JDS Uniphase (Nasdaq: JDSU). Price target $18.

ARGUS analyst says, "JDSU continues to show margin improvements throughout its diverse business units, helping it to supersede the effects of a challenging carrier spending environment. We note that intl. sales growth is also muting weak year-over-year comparisons in N. America. JDSU issued tame revenue guidance for the current quarter (fiscal 1Q09), and backslid slightly on margins in 4Q08. Nonetheless, we think JDSU has made big strides in aligning its costs to its operating structure, despite rising commodity and energy input costs. The company has paid off a portion of its debt, thus minimizing its interest cost, and is generating strong cash flows. As carrier spending returns to more normal levels, benefiting both optical communications and the broadband test & measurement business, we expect already good revenue growth to improve. In a rising revenue environment, we believe JDSU will be better positioned to leverage operating cost structure improvements to the bottom line, resulting in superior earnings leverage. Amid the recent weakness in the stock, we reiterate our BUY rating on the JDSU shares."

JDS Uniphase Corporation (JDSU) is a provider of communications test and measurement solutions and optical products for the telecommunications industry, which includes service providers, cable operators, and network equipment manufacturers.[SM]

Related Categories

Analyst Comments

Stocks Mentioned

Related Entities

• Argus

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?