Why Finisar Corporation Flew This Morning

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Finisar Corporation (NASDAQ: FNSR  ) climbed 4% this morning after Jefferies upgraded the data communications equipment company from hold to buy.

So what: Along with the upgrade, analyst James Kisner boosted his price target to $30 (from $24), representing about 34% worth of upside to yesterday's close. While momentum investors might be turned off by the stock's sluggishness over the past several months, Kisner thinks Finisar might be too good to pass up given the seemingly strong sector tailwinds working in its favor.

Now what: Jefferies lowered its 2014 EPS view for Finisar slightly from $1.60 to $1.58, but raised its 2015 view from $1.70 to $1.80. "We're upgrading FNSR to Buy given our checks suggesting very strong demand trends in data center optics and a good backdrop for Telecom optical spend in CY14," noted Kisner. "We see potential for significant upside to our raised EPS estimates driven by these trends." More importantly, with Finisar boasting a solid balance sheet and trading at a cheapish forward P/E of 12, the downside might be limited enough to take a chance on. 

More compelling ways to grow
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2834029, ~/Articles/ArticleHandler.aspx, 4/20/2014 5:30:18 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement