Monday, March 21, 2011

Opticals (JDSU) (FNSR) (OPXT) Correction Will Continue

Finisar (NASDAQ:FNSR), JDS Uniphase (NASDAQ:JDSU) and Opnext (NASDAQ:OPXT), among other optical companies will continue to experience a correction at minimum until the end of summer, according to Stifel Nicolaus analyst Ajit Pai.

Pai said that “the inventory correction and slowdown for the optical communications industry is likely to last at least until the end of the summer.”

While the Japan disaster won't won't affect demand in the industry, it will have an effect on making the slowdown worse because of increased uncertainty in general, added Pai, citing “rising inflation in emerging markets” and “uncertainty regarding upgrade/deployment plans at developed world tier one carriers.”

Pai estimates EPS for Finisar of $1.54 in the fiscal year ending in April, down 2 cents from his prior estimate, and $1.70 for 2012, down 8 cents. His price target on the company was lowered from $39 to $34.

For JDSU’s fiscal year ending in June 2011, Pai sees the company making 95 cents a share in 2011, down from 99 cents before, and $1.20 for 2012.

He maintains a "Buy" on Finisar and JDSU,, saying the long-term these remains in place for both of them.

JDS Uniphase closed Friday at $18.93, dropping $1.23, or 6.10 percent. Opnext closed at $2.25, down $0.16, or 6.64 percent. Finisar closed at $21.14, falling $0.70, or 3.21 percent.

No comments: