Analyst Update: Lumentum Holdings Inc, Finisar Corporation, and Encana Corp

Analysts are weighing in on Lumentum Holdings Inc (LITE), Finisar Corp (FNSR), and Encana Corporation (USA) (ECA)

Oct 11, 2016 at 2:51 PM
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Analysts are weighing in on optical product specialists Lumentum Holdings Inc (NASDAQ:LITE) and Finisar Corporation (NASDAQ:FNSR), as well as energy stock Encana Corp (USA) (NYSE:ECA). Here's a quick roundup of today's brokerage notes on LITE, FNSR, and ECA.

  • LITE has shed 9.4% to trade at $40.30, after Goldman Sachs lowered its rating on the stock to "sell" from "neutral." This bearish note comes on the heels of Lumentum Holdings Inc's new record high of $45.25, hit last Friday. In fact, the shares have been bolting up the charts over the last 12 months, adding 173%. Most analysts have high hopes for the stock, too, with 10 out of 13 maintaining a "buy" or better recommendation. However, considering LITE's 14-day Relative Strength Index (RSI) was sitting at 77 -- well into overbought territory -- heading into today's session, a near-term pullback may have been in the cards.
  • FNSR was upgraded to "buy" from "neutral" at Goldman Sachs, which also raised its price target to $39 from $24. The brokerage firm waxed optimistic on the stock's risk/reward profile, and said it expects the firm to "capitalize on key product cycles in the Telecom market, driving further acceleration in revenue growth." The shares initially popped on the upbeat attention -- tapping a new five-year high of $31.42 -- but have since reversed course amid broad-market headwinds, last seen down 3% at $29.72. Finisar Corporation has also been a long-term outperformer, more than doubling in 2016. However, short interest on the stock saw a 20.8% increase during the most recent two-week reporting period, with nearly 6% of FNSR's total float now wrapped up in these bearish bets.

  • ECA is off 0.5% at $11.04, as sinking oil prices overshadow an upgrade to "overweight" from "equal weight" at Barclays, which raised its price target on Encana Corp to $14 from $10. The stock has been on a tear for months, more than tripling from its February record low of $3.00 -- and hitting an annual high of $11.31 on Monday. Despite this incredible technical performance, however, ECA options traders have been shown a preference for long puts over calls. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 2.12 sits higher than 82% of all readings taken in the last year.
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