NEW YORK (TheStreet) -- J.P. Morgan initiated coverage on JDS Uniphase JDSU with a "neutral" rating and set a $12.50 price target. The firm noted the company is exposed to positive optical networking trends.
The stock closed at $12.54 on Tuesday.
Separately, TheStreet Ratings team rates JDS UNIPHASE CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate JDS UNIPHASE CORP (JDSU) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JDSU's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 3.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- JDS UNIPHASE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, JDS UNIPHASE CORP turned its bottom line around by earning $0.24 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus $0.24).
- Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.20 is very high and demonstrates very strong liquidity.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Communications Equipment industry and the overall market, JDS UNIPHASE CORP's return on equity is below that of both the industry average and the S&P 500.
- JDSU has underperformed the S&P 500 Index, declining 10.09% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full analysis from the report here: JDSU Ratings Report