Morgan Stanley analyst Meta Marshall upgraded the rating on Viavi Solutions to a Hold today, setting a price target of $11.00.
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Meta Marshall has given his Hold rating due to a combination of factors that reflect both potential growth opportunities and existing challenges for Viavi Solutions. The pending acquisition of Spirent’s assets is seen as a significant catalyst that could enhance Viavi’s position in the channel emulation market, offering growth prospects in technology testing markets. This acquisition is expected to provide potential accretion, which has led to an adjustment in the price target from $9.3 to $11, reflecting a more favorable multiple on the unchanged earnings power.
However, the decision to maintain a Hold rating also considers the volatility and risks associated with Viavi’s business. The company has significant exposure to service providers, whose spending has been more constrained, although there is healthy demand from other sectors like aerospace and defense, and the data center ecosystem. The Hold rating reflects a balanced view of these opportunities and risks, with potential downside from tariffs and slower recovery in carrier spending, while the acquisition’s successful closure remains a key factor for future growth.
Based on the recent corporate insider activity of 49 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of VIAV in relation to earlier this year.