Oclaro shares rise after analyst starts coverage of stock with ‘Buy’ rating
By APTuesday, July 13, 2010
Oclaro rises as analyst gives stock ‘Buy’ rating
SAN FRANCISCO — Shares of Oclaro Inc., which makes optical components for fiber optic networks, climbed Tuesday after a Citi Investment Research analyst began covering the stock with a “Buy” rating.
THE SPARK: In a client note, Citi analyst Kevin J. Dennean said that since Oclaro’s customers include telecommunications equipment makers Huawei Technologies Co., Alcatel-Lucent and Ciena Corp., the company is “leveraged to recovery in optical spending” and is a “proxy of overall demand.”
THE BIG PICTURE: Dennean thinks that telecommunications capital spending is quietly improving, and expects that carrier spending, outside of China, will rise in 2010.
THE ANALYSIS: Dennean initiated his Oclaro coverage and set a $16.50 price target, predicting the company will see faster earnings-per-share growth than analysts expect in general.
SHARE ACTION: Shares rose 75 cents, or 6.4 percent, to $12.45 in afternoon trading. The stock has ranged from $2.70 to $15.99 over the past year.
