Geez, I am a nobody and could have come up with the same analysis. I guess that brilliance is why they pay analysts the big bucks.
Oh well, better than nothing. I was hoping today's gain was due to a new deal signed but the analyst upgrade is better than nothing. This company's fate rests on two things- their superior technology and whether the customer and investor world recognizes the value in that technology. An analyst upgrade helps with the latter so it is a good thing.
I've said this a few times before but it perhaps bears repeating. Not only technology matters in winning sales of a technology product. Market perception matters a lot too. As a customer, one factor you are going to consider is that you want to buy what is destined to be the industry standard or whatever comes closest to that. And superior technology alone is not the sole determining factor of whose product becomes the standard. (Betamax versus VHS is often cited as an example, I don't know how valid the claim is that the superior technology lost out, but at least it illustrates the point)
Something that boosts the market perception of your product, such as in the case of INFN this Goldman report, helps improve your chances of becoming "the standard".
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.
Infinera Corp. (NASDAQ:INFN) was upgraded by stock analysts at Goldman Sachs from a “neutral” rating to a “buy” rating in a report issued on Wednesday, TheFlyOnTheWall.com reports. The firm currently has a $11.50 price objective on the stock, up from their previous price objective of $8.45. Goldman Sachs’ target price indicates a potential upside of 36.09% from the company’s current price.
A number of other firms have also recently commented on INFN. Analysts at MKM Partners cut their price target on shares of Infinera Corp. from $14.00 to $10.00 in a research note on Wednesday, January 22nd. They now have a “buy” rating on the stock. Analysts at FBR Capital Markets initiated coverage on shares of Infinera Corp. in a research note on Thursday, December 19th. They set an “outperform” rating and a $12.50 price target on the stock. Two analysts have rated the stock with a hold rating and five have given a buy rating to the company’s stock. The stock currently has a consensus rating of “Buy” and a consensus price target of $12.43.