Infinera Soars 25% Amid Solid Earnings; National Alliance Upgrades

National Alliance Securities upgraded Infinera Corp. INFN in a report issued Thursday from Hold to Buy and raised its price target from $10 to $13.

Analyst Brian Coyne made the changes "after the company reported better than expected Q3 results and Q4 guidance, and suggested a potentially faster rollout of its new metro cloud platform."

The report noted that broad-based demand fueled a strong quarter and outlook while "Q3 (Sep.) revs of $174M beat our $171M est., as solid demand trends across customer verticals and in Europe drove another record quarter of 100G port shipments. Infinera added three DTN-X customers (one new to the company) including, notably, a large NA industrial company building its own data center."

Coyne also mentioned that Cloud Xpress is ramping up and higher volumes are starting to drive margins.

The report concluded by raising "our Q4 revenue estimate to $182M, above the midpoint of guidance, and our adjusted EPS estimate is $0.12 vs. the guidance midpoint of $0.11...We raise our 12-month target to $13 from $10 based on an EV multiple of 2.0x CY15E sales of $738M."

Infinera Corp. recently traded at $13.37, up 25.8 percent.