Stifel analysts upgraded Viavi Solutions (NASDAQ:VIAV) to an investment rating of Buy from Hold, citing that the worst for the company is behind it, with expectations of earnings “likely to accelerate” and modest revenue recovery going ahead.
The analysts also hiked their price target for Viavi to $13 from $10.
“Despite the continued challenges in the SP markets, VIAV exceeded expectations for the December quarter and provided guidance inline with consensus expectations for March. The offset to the weak SP environment has been accelerating demand for 400G and 800G fiber testing equipment and various areas of the Military and Aerospace markets. With some peers, such as COHR, beginning to see modest improvements in Telco orders, we believe that the worst for VIAV is behind us,” Stifel said in a February 11 research note.
“In 2023, VIAV shares declined 4%, significantly underperforming the broader technology peer group. Irrelevant within the broader AI backdrop. We think a lot of bad news is in the stock, and looking ahead, we believe that VIAV will play a role in our broadening of AI theme as the use of high-speed interconnect technologies accelerates and testing requirements become increasingly complex,” they added.
VIAV +8.9% at $9.78 on Monday. Shares of the company -11.5% YTD.