Viavi downgraded to Underweight from Equal Weight at Morgan Stanley

Morgan Stanley downgraded Viavi (VIAV) to Underweight from Equal Weight with a price target of $9.50, up from $8. The firm says that with the company’s profitability being more driven by Optical Security and Performance, where growth prospects are limited, its earnings upside is more limited. There isn’t enough upside here to drive meaningful upside to earnings, and there are more attractive risk/reward skews elsewhere, the analyst tells investors in a research note. If Viavi ends up being the winning bidder for Spirent’s assets there could be more upside in near term, but there will be multiple bidders, adds Morgan Stanley.