UPDATE: Deutsche Bank Reiterates On NeoPhotonics On Weak Gross Margin Outlook

In a report published Tuesday, Deutsche Bank analyst Greg Poole reiterated a Hold rating on

, but lowered the price target from $5.50 to $4.50. In the report, Deutsche Bank noted, “Maintain Hold on weak (low 20s) gross margin outlook; higher 1H opex. Neo reported Q4 CY13 [$74.4M / ($0.06)] – slightly light on revs; slightly better on loss/share and guided Q1: $67.5M to 68.5M in revs – appx inline vs consensus, and ($0.28) to ($0.32) in loss/share (vs ($0.17) consensus) based on a 20-23% gross margin outlook. The Q2/14 outlook calls for $73M to 78M in revs – appx inline vs consensus, with the gross margin guidance in the 20-25% range. The below consensus (low 20s) gross margin view – combined with management noting product strength coming from lower margin Access in China – is likely to stretch out the timing to profitability in our view. Maintain Hold; our PT moves from $5.50 to $4.50 on our updated FY14/15 estimates.” NeoPhotonics closed on Monday at $4.35.