Viavi Solutions (VIAV) PT Lowered to $13 at Rosenblatt

Rosenblatt analyst Mike Genovese lowered the price target on Viavi Solutions (NASDAQ: VIAV) to $13.00 (from $15.00) while maintaining a Buy rating.

The analyst comments "Last week Keysight (KEYS, NR) outbid Viavi by ~15% for Spirent (SPT-LON, NR), offering 199 pence per share or ~$1.5bn total for the company. We do not expect Viavi to get into a bidding war and now see KEYS as the most likely buyer despite the greater product overlap and more complicated regulatory approval process, including review in China. We are reiterating our Buy rating on VIAV despite the set back on the Spirent deal. We like the stock because 1) Telecom demand is at the bottom and should strengthen in 2HCY24 and more in CY25; 2) Viavi has a growing 800G Datacom Lab Test business that will become more apparent in the numbers when Telecom 800G Test demand improves; and 3) There are other M&A deals Viavi can pursue, such as NetScout (NTCT, NR). We increased our VIAV price target to $15 following the original announcement of the Spirent deal due to EPS accretion. We are now moving back to a $13 price target, based on 2.8x EV-to-Sales, given that Viavi is unlikely to acquire the company."

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