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JDS Uniphase Gets Mixed Analyst Attention After Earnings

JDSU receives bullish price-target hikes, as well as a bearish downgrade

by 2/2/2012 12:30:07 PM
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JDS Uniphase Corporation (JDSU - 12.19) took its turn in the earnings confessional after last night's bell. For the fiscal second quarter, JDSU recorded a loss of $10.2 million, or 4 cents per share, compared to its year-ago profit of $23.6 million, or 10 cents per share. Excluding items, earnings arrived at 15 cents per share. Revenue was also on the decline, falling 13% to $413.1 million. The results bested analysts' expectations for earnings of 10 cents per share on $390.9 million in sales. For the current quarter, JDSU expects revenue to land between $410 million and $425 million, with analysts calling for quarterly sales of $418 million.

Not even a slew of price-target bumps from the likes of Piper Jaffray, Jefferies, and Stifel Nicolaus is helping JDSU in today's session, with the stock down more than 7% at last check. One lonely dissenter chose to climb on the bearish bandwagon, however, with UBS cutting its outlook on the stock to "neutral" from "buy."

Ahead of today's post-earnings plunge, sentiment surrounding the telecom concern was bullish. Sticking with the brokerage bunch, Zacks reports that 10 out of 14 analysts maintain a "buy" or better recommendation toward the stock. Also, the average 12-month price target of $14.72 -- as calculated by Thomson Reuters -- represents a healthy 22% premium to today's intraday low of $12.08.

Elsewhere, JDSU's Schaeffer's put/call open interest ratio (SOIR) of 0.48 shows that call open interest more than doubles put open interest among options slated to expire within three months. This ratio ranks just six percentage points from a 52-week low, indicating that speculators have rarely been more call-heavy toward the stock.

Price Chart of JDSU

Technically, JDSU has fared well in 2012, with the shares sitting on an impressive 25.8% year-to-date gain. In addition, the security has outperformed the broader S&P 500 Index (SPX) by almost 14 percentage points, on a relative-strength basis during the past 20 sessions. Today's dip puts the stock at risk of moving back below the $13 mark -- a previous level of resistance that JDSU recently toppled. Should the equity fail to shake off today's post-earnings slump, bullish brokers and bettors may follow in the footsteps of UBS -- putting JDSU at risk of sinking even lower.

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