On Monday, B. Reilly updated the following view: Infinera Corporation . (NASDAQ: NASDAQ:), has raised its price target to $9.00 from $7.50. The company maintained its stock rating at “buy.” The decision was made after evaluating the company's prospects and performance following the OFC Post-Optical Networking and Telecommunications Conference.
B. Riley analysts justified the revised price target by increasing the EV/sales multiple applied to the 2024 sales forecast, factoring in net debt, from 1.5x to 1.7x. This change reflects a more optimistic outlook for Infinera's financial performance.
Infinera, a provider of intelligent transport networks, appears to be performing well in a tough communications market. B.Riley's analysts highlighted several factors that could contribute to the company's success. These include a range of new customer acquisitions, including tier-1, cloud operators and subsea customers, which are expected to drive growth.
Additionally, the company's data center business is said to be strong, with growth in pluggable solutions expected to contribute positively. Vertical integration efforts are also expected to help expand profit margins, according to analyst comments.
Analysts' comments highlight that despite the current telecom market downturn, Infinera is deploying company-specific catalysts that have the potential to outpace overall industry growth.
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