Auriga Confident In Oclaro (OCLRD), Shares Up 6%
April 30, 2010 10:27 AM
Auriga analyst Chandan Sarkar reiterated a Buy rating for shares of Oclaro, Inc. (Nasdaq: OCLRD) and increased the price target.
Sarkar said that despite the fact that Oclaro, Inc. announced an offering of shares that will dilute existing shareholders earnings per share by about 14%, the company's accelerating fundamentals should push the stock higher.
The analyst noted that Oclaro, Inc. already reported strong fiscal 3rd quarter results and gave strong guidance for the 4th quarter as well.
The Auriga analyst wrote, "while this dilution may reduce the Street’s enthusiasm in the near term, we note the reaction of the recent deal from Finisar (FNSR, Buy) as an indication that accelerating fundamentals in the optical sector are likely to overwhelm the dilution effect. We remain buyers of the stock and are increasing our price target to $4 from $3 based on improving fundamentals driving higher EPS estimates(despite the dilution posed by the deal)."
Shares of Oclaro, Inc. were up more than 6% to $14.94 during the Friday morning trading session.
