Deutsche Cuts Price Target on NeoPhotonics (NPTN) Following New Q3 Outlook
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Price: $16.01 --0%
Rating Summary:
3 Buy, 11 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 11 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Deutsche Bank is maintaining its Hold rating on shares of NeoPhotonics (NYSE: NPTN) while reducing its price target from $6 to $5.
The company pre-announced its Q3 results with sales expected to be $43-$45 million, below its previous guidance of $48-$53 million. Management noted that downside was due to weaker than expected sales from Huawei.
The firm reports that managements efforts to diversify its revenue stream maybe hurting its margins in the long-run. Currently, Huawia makes up 50 percent of total sales.
An analyst at Deutsche comments, "We have determined our price target using a discounted cash flow analysis. For this, we assume a WACC of 11% and a 5% perpetual growth rate. . Upside risks to the our price target include better than expected demand and design wins, as well as improving operating leverage. Downside risks to our target include further delays in carrier optical upgrades and volatile customer ordering patterns."
Deutsche lowered its FY11 and FY12 EPS estimates from ($0.44) and ($0.06) to ($0.53) and ($0.19).
For more ratings news on NeoPhotonics click here and for the rating history of NeoPhotonics click here.
Shares of NeoPhotonics closed at $6.65 yesterday.
The company pre-announced its Q3 results with sales expected to be $43-$45 million, below its previous guidance of $48-$53 million. Management noted that downside was due to weaker than expected sales from Huawei.
The firm reports that managements efforts to diversify its revenue stream maybe hurting its margins in the long-run. Currently, Huawia makes up 50 percent of total sales.
An analyst at Deutsche comments, "We have determined our price target using a discounted cash flow analysis. For this, we assume a WACC of 11% and a 5% perpetual growth rate. . Upside risks to the our price target include better than expected demand and design wins, as well as improving operating leverage. Downside risks to our target include further delays in carrier optical upgrades and volatile customer ordering patterns."
Deutsche lowered its FY11 and FY12 EPS estimates from ($0.44) and ($0.06) to ($0.53) and ($0.19).
For more ratings news on NeoPhotonics click here and for the rating history of NeoPhotonics click here.
Shares of NeoPhotonics closed at $6.65 yesterday.
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