Morgan Stanley downgraded Finisar (FNSR) to market perform from outperform.
Analyst Robert Montague says Finisar is well positioned in its space, but Emulex's commentary on OEM customers, with reported order timing issues there, could affect Finisar as it is a vendor to Emulex. Montague says if Emulex's issues broaden and deepen, it will pass through to Finisar. While Emulex is only one in his universe to report order issues, he says it does cause concern about overall short-term sector fundamentals. He will get a better feel for where the trend line should be as Brocade Communications and Finisar are due to report 2H earnings.