Nomura Assigns a Buy Rating on Ciena Corp

By Ryan Adsit

In a report issued on May 30, Jeff Kvaal from Nomura assigned a Buy rating to Ciena Corp (NYSE: CIEN), with a price target of $30. The company’s shares closed yesterday at $23.05.

Kvaal said:

“F2Q sales meet expectations, but soft margins drive EPS miss. Webscale hit a record 17% of sales and lifted sales to $730mn, just above consensus. EMEA and APAC are also healthy, though AT&T and Verizon seem uninspired. The low-margin new wins and weak software mix drove a 220bps QoQ gross margin decline. This limited $0.23, which was well below consensus of $0.30. Revenue picture brightens; Ciena lifts 2018 guidance to 7-9% growth. Record 2Q webscale and India orders allowed Ciena to offer F3Q guidance of $790mn. This is well above consensus of $769mn. Ciena’s new 7-9% 2018 outlook exceeds its prior >5% view; its 5-7% three-year view is steady. Share gains require lower margins… for now. Ciena strengthened its share gain story by citing eight Tier 1 telco competitive wins this year and a second straight strong webscale quarter.”

According to TipRanks.com, Kvaal is a 5-star analyst with an average return of 18.7% and a 60.2% success rate. Kvaal covers the Consumer Goods sector, focusing on stocks such as CommScope Holding, Arista Networks, and F5 Networks.

Currently, the analyst consensus on Ciena Corp is Strong Buy and the average price target is $31.67, representing a 37.4% upside.

In a report issued on May 23, Loop Capital Markets also initiated coverage with a Buy rating on the stock with a $31 price target.

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The company has a one-year high of $27.73 and a one-year low of $19.40. Currently, Ciena Corp has an average volume of 3.56M.

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Ciena Corp. engages in the provision of network and communication infrastructure. It operates through the following segments: Converged Packet Optical; Packet Networking; Optical Transport; and Software and Services. The Converged Packet Optical segment develops and sells optical processors, switching systems, and operating system software.