Zacks Investment Research downgraded shares of JDS Uniphase Corporation (JDSUD) from OUTPERFORM to NEUTRAL on March 13, 2013, with a target price of $16.00.
We downgrade our recommendation on JDS Uniphase to Neutral based on its high level of current valuation, which moved up nearly 80.5% in the last year. At this stage, the stock is unlikely to provide above market gain. Meanwhile, JDS Uniphase's newly launched products, which are gaining solid market traction coupled with the recent acquisition of Arieso become long-term positives for the company. In the second quarter of fiscal 2013, the newly launched differentiated products accounted for 54% of its total revenue in the core network market. Management provided an optimistic outlook for the rest of fiscal 2013. We believe carrier expenditures for high-speed broadband network buildout, mobility and 100 Gbps Ethernet network will increase in 2013, aiding JDS Uniphase's prospects over the long haul. Going forward, the company is expected to improve its gross and operating margins, adjusted EBITDA and cash flow.
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