Shares of JDS Uniphase Corp. headed higher Wednesday after a Citi Investment Research analyst started coverage of the communications equipment maker with a "Buy" rating.
Analyst Kevin J. Dennean set a target price of $9.50 for the company's shares.
"We believe many need to re-familiarize themselves with the 'new' JDSU in light of changing business mix," he wrote in a note to investors.
JDS Uniphase makes communications equipment and testing instruments, as well as optical components for machines such as photocopiers and scanners, and a range of lasers. Its customers range from AT&T Inc. to Time Warner Inc.
Dennean said optical components now only make up a third of the company's sales, while the company's test and measurement segment _ a higher-margin business _ is about 50 percent. The analyst expects continued growth in this segment, as well as a recovery in the company's communications and commercial optical segment as spending by telecom carriers improves.
Shares of the Milpitas, Calif.-based company rose 31 cents, or 4.2 percent, to $7.71 in afternoon trading. In the past 52 weeks, the stock has traded between $2.21 and $8.38.