Viavi Solutions (NASDAQ: VIAV) saw its stock price plummet by 19.48% in pre-market trading on Friday, following a bearish outlook from Morgan Stanley. The sharp decline comes despite the investment bank slightly raising its price target for the company from $8 to $8.60, while maintaining an Underweight rating.

The negative sentiment from Morgan Stanley stands in stark contrast to the broader analyst consensus. According to FactSet, Viavi Solutions maintains an average Overweight rating with a mean price target of $12.26. This discrepancy highlights the divergent opinions on Wall Street regarding the company's future performance, likely contributing to investor uncertainty and the subsequent stock volatility.

Adding to the mixed signals, other financial institutions have also adjusted their price targets for Viavi Solutions. UBS cut its target price to $11 from $11.50, while Rosenblatt Securities raised its target to $13.5 from $12. These conflicting adjustments further underscore the complexity of the current market sentiment surrounding the company.

Interestingly, a recent analysis by Simply Wall St suggests that Viavi Solutions could be significantly undervalued, with a fair value estimate of $17.10 per share. This stark contrast between the current market reaction and potential intrinsic value may present an opportunity for investors willing to look beyond short-term volatility. However, the immediate market response indicates that investors are giving considerable weight to Morgan Stanley's pessimistic outlook, resulting in the dramatic pre-market drop.