Piper Jaffray Downgrades Anaren (ANEN) to Neutral

August 7, 2008 8:13 AM EDT

Piper Jaffray downgrades Anaren (NASDAQ: ANEN) from Buy to Neutral and lowers their price target from $11 to $10. Piper Jaffray also lowers their FY09E EPS from $0.90 to $0.82.

The firm highlighted that Anaren’s FYQ408 results included better than expected total sales in its Space and Defense group but was offset by higher project and restructuring costs during the quarter. Piper Jaffray lowers their gross margin assumptions from 32.2% to 31.8% in FY2009 as "other issues such as yield and process problems for defense related projects could potentially impact gross margin for the next several quarters."

Long term, the firm believes that Anaren will improve profitability as the company ramps sales in its consumer and wireless divisions. In addition, the company has a strong pipeline in its space and defense division, and Piper Jaffray anticipates "a stronger revenue mix from this traditionally higher margin division should favorably impact FY2009 results."

However, Piper Jaffray said, "we believe the resolution of recent yield issues in its Space and Defense division and timing of the product transition at its major wireless infrastructure customer remains uncertain and could potentially create further margin degradation."

Anaren, Inc. is a provider of RF and microwave components and assemblies for the wireless, consumer, and space and defense markets.

Related Categories

Downgrades

Stocks Mentioned

Related Entities

• Piper Jaffray

Add Your Comment

Name

Subject

Body

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