Opnext Shrs Tumble On J.P. Morgan Downgrade
Opnext (OPXT) shares are down sharply after J.P. Morgan analyst Ehud Gelblum cut his rating on the provider of optical networking equipment to Underweight from Neutral.
The analyst writes that the company’s legacy business is continuing to suffer from an inventory correction, resulting in flat revenue at best over the next few quarters. He also contends that high yen exposure leaves margins at risk. Gelblum expects Opnext to burn cash for the next 8 quarters, which he says means the $1.30 a share cash balance on the company’s books provides little support for the stock.
