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Technology Stocks : JDS Uniphase (JDSU)
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To: N. David Lessani who wrote (17827)2/6/2001 2:39:56 AM
From: pat mudge  Read Replies (1) of 24042
 
Thanks for the article. When there's so much negativity, it's good to see something that validates a healthy sector.

Here's the DBAB report that came out earlier today.

JDS UNIPHASE CORPORATION [JDSU] "BUY"
Getting Closer to Judgement Day, Short-Term Visibility Continues to be Challenging
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Date: 02/02/2001 EPS 2000A 2001E 2002E
Price: 50.0 1Q 0.08 0.18 NE
52-Wk Range: 153 - 37 2Q 0.09 0.21A NE
Ann Dividend: 0.0 3Q 0.11 0.21 NE
Ann Div Yld: 0.00% 4Q 0.14 0.22 NE
Mkt Cap (mm): 50,600 FY(Jun.) 0.42 0.82 1.12
3-Yr Growth: 50% FY P/EPS NM 61.X 44.6X
CY EPS 0.62 0.95 NE
Est. Changed No CY P/EPS 80.6X 52.6X NM

HIGHLIGHTS:
1. We expect DOJ approval for the SDLI merger to come through this week and shareholders of both JDSU and SDLI should be able to vote on the merger on February 12th, the scheduled date for the joint shareholder meeting.

2. Continued inventory issues at system vendors coupled with carrier capex uncertainties lead us to believe that achieving the 7%-10% (management's guidance) sequential revenue growth in the current quarter is quite challenging.

3. Accordingly we have revised our sequential revenue growth estimates for the current quarter to 5% for 3Q FY 01 and 5% for 4Q FY 01 from our earlier estimate of 8.5% and 8% respectively. We are retaining our EPS estimates.

4. Our preliminary analysis indicates that the Pro Forma JDSU/SDLI EPS, post Zurich plant divestiture would be neutral to mildly accretive to JDSU's current estimated FY 2002 EPS of $1.12.

5. We reiterate our Buy rating on the stock as a combination of JDSU and SDLI would give rise to the largest and most profitable company in one of the fastest growing sectors of the economy despite the current visibility problems in the short term. The current weakness in the stock, in our opinion, provides an excellent entry point for investors looking to build a position, as we believe the DOJ approval this week will remove the uncertainty clouding the stock.

Pat
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