Why Infinera Corp. Is Poised to Bounce Back
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Infinera climbed about 5% in premarket trading Wednesday after Goldman Sachs upgraded the optical networking technologist from neutral to buy.
So what: Along with the upgrade, analyst Simona Jankowski planted a price target of $11.50, representing about 36% worth of upside to yesterday's close. While momentum traders might be turned off by the stock's weakness in recent months, Jankowski's call suggests growing sentiment on Wall Street that Infinera is now too cheap to pass up.
Now what: According to Goldman, Infinera's risk/reward trade-off is particularly attractive at the moment. "We believe consensus is underestimating the revenue growth potential associated with customer upgrades and market share gains in 100G long haul, which is forecast to grow at nearly a 40% CAGR through 2015," said Jankowski. When you couple that upbeat outlook with Infinera's solid balance sheet and sluggish stock price, it's tough to disagree with Goldman's downgrade.
More compelling ways to grow
They said it couldn't be done. But David Gardner has proved them wrong, time, and time, and time again, with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently, one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.
The article Why Infinera Corp. Is Poised to Bounce Back originally appeared on Fool.com.Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Infinera. The Motley Fool owns shares of Infinera. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.