Finisar shares climb after Piper upgrade

AP News
Posted: Dec 14, 2009 3:06 PM

Shares of Finisar Corp. advanced Monday after an analyst upgraded the networking components maker, saying a recent sell-off of the stock created a "more compelling entry point."

Piper Jaffray analyst Troy D. Jensen raised his rating on Finisar to "Overweight" from "Neutral" and kept his share price target at $10.

Finisar's shares took a hit earlier this month after the company reported lower-than-expected profit margins, missing expectations for its fiscal second quarter. Between Dec. 1 and Dec. 10, the stock slid nearly 15 percent.

But Jensen said the company's revenue guidance was "relatively conservative and, if the demand environment remains strong, Finisar could easily exceed consensus estimates."

The company had forecast revenue of $148 million to $158 million for the fiscal third quarter, which ends in January. Analysts polled by Thomson Reuters predict sales of $154.1 million.

Jensen also predicted a rebound in Finisar's gross margins, saying the company should show "solid" improvements when compared with the previous quarter.

Shares of Finisar climbed 36 cents, or 4.4 percent, to $8.47 in afternoon trading. In the past 52 weeks, the stock has traded between $1.68 and $10.80.