Analysts Weigh In On Two Falling Stocks: Infinera Corp. (INFN), Ocwen Financial Corp (OCN)


Infinera Corp.

Infinera Corp. (NASDAQ:INFN) shares are falling over 20% on Friday, after the optical-equipment maker reported first-quarter revenue that failed to live up to Wall Street’s expectations.

Adding insult to injury, MKM Partners analyst Michael Genovese downgraded the stock from Buy to Neutral, while reducing the price target to $15 (from $21).

Genovese explained, “We are downgrading Infinera to Neutral from Buy because the new Metro-focused Transmode acquisition is performing worse than expected. The solid long haul business is no longer enough to justify a Buy rating, in our view, as the company has become a show-me story in Metro 100G. Transmode is doing worse because one of its largest customers has not been making any purchases. Also, we do not sense any change in the time line for Transmode revenues synergies from the incumbent Infinera customer base. This still remains a 2017+ event with only an outside chance of meaningful positive surprise in 2016. Finally, while the recent CloudXpress performance has been strong, management sounds cautious about sequential growth over the next couple of quarters due to competitive entries in the market.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Genovese has a yearly average return of 3.9% and a 45.8% success rate. Genovese has a 26.7% average return when recommending INFN, and is ranked #818 out of 3914 analysts.Out of the 10 analysts polled by TipRanks, 7 rate Infinera stock a Buy, while 3 rate the stock a Hold. With a return potential of 64%, the stock’s consensus target price stands at $19.75.

Ocwen Financial Corp

Ocwen Financial Corp (NYSE:OCN) saw its shares tank 20% over trading on Friday, after the mortgage servicing firm reported first-quarter results that reveal significant operational challenges.

In reaction, Piper Jaffray analyst Kevin Barker reiterated a Neutral rating on the stock, while reducing the price target to $2.50 (from $4.00), which implies an upside of 13% from current levels.

According to TipRanks.com, Barker has a yearly average return of 5.5% and a 62% success rate. Barker has a 10.9% average return when recommending OCN, and is ranked #498 out of 3914 analysts.

Out of the 6 analysts polled by TipRanks, 5 rate Ocwen Financial Corp stock a Hold, while 1 rates the stock a Sell. With a return potential of 142%, the stock’s consensus target price stands at $5.38.