Markets & Finance

Robertson Stephens Cuts JDS Uniphase to Market Perform


Robertson Stephens downgraded shares of JDS Uniphase (JDSU ) to market perform from buy, after the company posted a first-quarter loss of $0.20 per share. JDS also lowered second-quarter guidance.

Analyst Arun Veerappan says the company is closer to a bottom, and revenues are likely to expand at double-digit quarter over quarter rates once the inventory correction subsides. He says 2003 revenue could be $2.1 billion. However, even based on thsoe assumptions, the stock arrives at his $9 target price based on discounted cash flow (DCF) analysis, at 40 times his 2003 $0.22 DCF estimate. Therefore, the stock is trading above fair valuation, according to Veerappan. Longer term, the analyst says the company remains a franchise player, given strong balance sheet, and he believes there can be no doubt that JDS will emerge as survivor.


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