UPDATE: Stifel Nicolaus Maintains By, Lowers PT to $10 on EXFO

Stifel Nicolaus reiterates its Buy rating on EXFO EXFO and lowers its target price to $10 from $12 as the company's guidance disappoints. Stifel Nicolaus says, "EXFO provided F2Q12 (February) guidance for sales of $65-$70 million and non-GAAP EPS of $0.04-$0.08, both of which are below our and consensus expectations. Although disappointing, we remain positive on EXFO as our analysis indicates the company's focus on higher margin Protocol, wireless and service assurance deals, increased software mix, and penetration of under-penetrated markets will benefit gross margin relative to current levels, with our model targeting 65.1% in FY13." EXFO closed at $6.45 per share on Wednesday.