One thing earnings season always does is shake out the truth on what’s really going on at the top companies, as the numbers don’t lie, and giving forward guidance that is unreasonable is always frowned upon. With the first-quarter earnings parade starting to wind down this week, the top Wall Street firms are taking a hard look at how things went to start the year off and how they may proceed going forward.
In a series of new research reports, Deutsche Bank analysts focus on earnings results and where they think some of the stocks they cover are headed as we roll into May and are almost halfway through the second quarter. We found four companies rated Buy, and three are well off their 52-weeks highs, that the analysts stay positive on.
This is a top chip company that often stays under the radar. Inphi Corp. (NYSE: IPHI) provides high-speed analog and mixed signal semiconductor solutions for the communications, data center, and computing markets worldwide. The company’s end-to-end data transport platform delivers high signal integrity at leading-edge data speeds, addressing performance and bandwidth bottlenecks in networks, from fiber to memory. Inphi’s solutions minimize latency in computing environments and enable the roll-out of next-generation communications infrastructure.
Many on Wall Street feel that the battle for dominance in outsourced cloud services between Amazon, Google, Microsoft and others should continue to drive growth in data center capital expenditures. The analysts feel that cloud data center customers are more likely to embrace Inphi’s exciting 100G products like the PAM-4 solutions, ColorZ and others. The company reported solid first-quarter earnings and had positive guidance for this quarter.
The Deutsche Bank price target for the stock is $40, and the Thomson/First Call consensus price target is $37.85. Shares closed Monday at $30.47.
This is a solid technology stock that has been on a long roller-coaster ride for investors over the past two years. Juniper Networks Inc. (NYSE: JNPR) is a provider of high-performance network infrastructure to service providers and enterprises. Key products include IP-based routers for service provider core and edge networks, security solutions and high-end enterprise routing equipment. Juniper’s products support converged data, voice, video and wireless applications across extended networks.
The stock has taken a big hit since printing highs in November and is back to a reasonably solid support level for investors looking to buy shares. The company had negatively pre-announced prior to releasing earnings, but at least came in at the top level of that guidance. While the second-quarter outlook was somewhat weaker than consensus, it appears margins are firming and the stock looks cheap here.
Investors receive a 1.71% dividend. The $30 Deutsche Bank price target is higher than the consensus price objective of $26.86. The stock closed Monday at $23.35.