Bank of America Securities analyst Tal Liani reiterated a Buy rating on Ciena (CIEN – Research Report) yesterday and set a price target of $95.00.
Tal Liani has given his Buy rating due to a combination of factors including Ciena’s strong positioning in the infrastructure buildout market and anticipated revenue growth. Despite a decline in cloud revenues in the first quarter, the company expects a significant acceleration in growth, driven by strong demand in various segments such as submarine, data center interconnect, and metro. Ciena’s innovative Wavelogic 5 nano technology has positioned it well in the pluggables market, with expectations for revenues to double this year.
Moreover, service providers have shown robust recovery, growing by 14% in the first quarter, and are expected to continue supporting cloud traffic through infrastructure investments. Although gross margins were unusually high due to one-time benefits, they are projected to stabilize and improve in the latter half of the year. These factors, combined with a positive outlook for cloud-related revenues, underpin Liani’s confidence in Ciena’s growth trajectory and justify the Buy rating.
In another report released yesterday, Raymond James also maintained a Buy rating on the stock with a $79.00 price target.
Based on the recent corporate insider activity of 101 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CIEN in relation to earlier this year.
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