On Monday, Infinera Corp . (NASDAQ:INFN) stock experienced a change in stock rating as Craig-Hallum adjusted its stance from Buy to Hold, setting a new price target at $6.65, a significant decrease from the previous target of $12.00.
The change follows the recent announcement that Nokia (HE:NOKIA) intends to acquire Infinera at a rate of $6.65 per share, payable in cash and/or stock. The definitive agreement was made public after the market closed last Thursday.
The revised rating reflects the acquisition price, with the analyst noting the limited risk associated with the deal's completion. The report suggests that the new price target is aligned with the terms of the acquisition agreement. Consequently, Craig-Hallum sees no further upside for the stock, leading to the rating downgrade.
The analyst indicated that while the deal is expected to follow through without complications, there may be an opportunity for short-term traders. They could purchase Infinera shares in anticipation of potential interest from other companies that might consider a bid for the company.
The acquisition, if finalized, will result in Infinera becoming part of Nokia's portfolio at the stated purchase price. The market is now observing how this acquisition will unfold and if any other suitors will emerge for Infinera.
Investors and market watchers are advised to monitor the situation, as any new developments regarding the acquisition could influence Infinera's stock performance in the short term. For now, the company's stock will likely trade around the acquisition price until the transaction is completed or new information arises.
In other recent news, Nokia is set to acquire Infinera for $2.3 billion, a move that will position Nokia to capitalize on the expanding artificial intelligence industry and increase its market share in the optical networking sector.
This acquisition comes at a time of anticipated market recovery and is expected to significantly boost Nokia's involvement in data center investments. The deal has received strong investor confidence and will be financed through a combination of cash and stock.
Additionally, Infinera's stock was downgraded from "Buy" to "Hold" by Stifel following the announcement of the acquisition. Despite a recent revenue shortfall and anticipated year-over-year revenue decline, Infinera remains optimistic about its long-term growth prospects, citing strong bookings and strategic deal momentum.
Infinera also recently received a noncompliance notice from the Nasdaq Stock Market due to delays in filing required financial reports. The company is working diligently to regain compliance and has expressed intentions to meet the filing deadlines. These are the recent developments that investors should be aware of.
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