Halister News

(Bloomberg) -- Following are forecasts for today’s U.S. economic releases as compiled by Bloomberg News:

• U. Mich Conf 96.5; range 94 to 98.5 (60 estimates)
• U. Mich Curr 112.5; range 112 to 112.9 (3 estimates)
• U. Mich Exp 86.5; range 85 to 86.6 (3 estimates)
• • "While political analysts raise questions regarding the timely execution of Trump’s domestic agenda, consumers appear to be ‘keeping the faith."’: Bloomberg Intelligence
  • In March, the index rose to 96.9, with current conditions reading the strongest since July 2005

(Bloomberg) -- Applied Optoelectronics has plenty of more room to rally, thanks to strong demand from Amazon, Facebook and Microsoft for its datacenter products, analysts say. Other optical stocks are higher pre-market after Applied posted preliminary first quarter adjusted EPS, revenue and gross margin that were ahead of the its own previous guidance, given Feb. 23, as well as analyst estimates. PIPER JAFFRAY (Troy Jensen)

• Believes 100G tranceivers will be supply constrained for nearly all of 2017 and anticipates AAOI will continue to take share and grow aggressively in this market
• Sees solid visibility for the remainder of 2017 thanks to large and growing demand from AMZN and FB
• Overweight, $58 PT

JEFFERIES (James Kisner)

• AAOI results most positive for FNSR, and to a lesser degree OCLR, LITE and MLNX
• Strong gross margin guidance is encouraging, confirms a healthy pricing environment for 100G optics
• 2Q guidance should be strong as China resumes purchases and hyperscale demand for optics ramps up
• Recent selloff in the sector is a buying opportunity

RAYMOND JAMES (Simon Leopold)

• Has been puzzled by recent weak trading, with AAOI down 32% from March 27 close
• Believes 100G demand remains strong from AMZN, assumes FB stays material and MSFT has not yet rebounded
• Inclined to model conservatively due to worries about customer concentration, increasing competition
• Strong buy, PT $74 from $62

COWEN (Paul Silverstein)

• Sees meaningful upside to AAOI’s operating model and shares, driven by positive leverage to Web 2.0, early-stage ramp of 100G and potential penetration of China
• Believes AAOI’s ability to vertically integrate and manufacture virtually all 100G components should fuel higher gross margins despite price erosion
• “The vast majority of the 100G opportunity still lies ahead”
• Outperform rating, PT $75 from $66

RELATED

• AAOI 5 buys, 1 hold, 1 sell, avg. PT $59: Bloomberg data
• AAOI +24% pre-market; optical peers trading higher include OCLR +4.4%, ACIA +2.9%, LITE +2%, FNSR +5.1%, VIAV +3.5%, IIVI +4.2%, CIEN +1.6%
• April 12, Applied Optoelectronics 1Q Prelim. EPS, Revenue Top Estimates