MKM Partners Reiterates Buy on Ciena (CIEN) Ahead of 3Q Report
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MKM Partners reiterated a Buy rating and $26.00 price target on CIENA (NYSE: CIEN) ahead of the company's 3Q earnings report. Based on checks, MKM expects Ciena to report mid to high-single-digit millions of Verizon Metro revenues in 3QFY16, likely increasing to double-digit millions in 4QFY16.
Analyst Michael Genovese commented, "We are reiterating our Buy rating in front of 3QFY16 earnings due on Thursday, September 1 before the open. Consensus revenue expectations for 3QFY16 (+5% q/q, +11% y/y) and 4QFY16 (+7% q/q, +4% y/y) are not particularly easy, but we think Ciena is set up well to meet or slightly beat given strong ongoing order trends over the past several quarters. The U.S. Metro 100+G cycle is the reason to own the stock, and our checks at accounts including Verizon, CenturyLink, Comcast and AT&T (T, NR, $41.01) suggest that U.S. Metro 100+G demand is accelerating. We think Ciena should do well in 2HFY16 and FY2017 propelled by 100+G Metro."
Shares of CIENA closed at $21.58 yesterday.
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