Wells Fargo Cuts Valuation Range on CIENA (CIEN) Ahead of Q4 Results, Sees a Possible Miss
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Price: $44.72 +1.82%
Rating Summary:
25 Buy, 5 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
Rating Summary:
25 Buy, 5 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
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Wells Fargo is reaffirming its Outperform rating on shares of CIENA (NASDAQ: CIEN), but is reducing its price valuation range from $17-$19 to $15-$17 ahead of its Q4 results.
The company is expected to release its Q4 results on Thursday December 8 before the opening bell. A conference call is scheduled with management at 8:30am EST.
The firm believes CIEN will report Q4 sales inline with expectations while earnings and margins fall below. Wells Fargo estimates $450 million in sales, EPS of $0.06, and gross and operating margins of 43 percent and 3.3 percent. The Street is currently forecasting earnings of $0.07 per share on $450.27 million in total sales for the quarter.
Due to the potential for weak spending from the company's key customers, like AT&T (NYSE: T), the firm is also cutting its Q1 sales and EPS estimates to $446 and $0.06, well below the Street's consensus of $458.61 million and $0.10. Wells Fargo also lowered its gross and operating margin estimates from 43.3 percent and 4.8 percent to 42.8 percent and 3.4 percent.
An analyst at Wells Fargo comments, "We believe Ciena continues to experience strong orders and win rates for its 40/100G transport, OTN switching and wireless backhaul solutions, which could drive improved financial performance as orders convert to sales in FY2012. Given our belief that nearterm challenges are in the stock, we continue to recommend Ciena shares."
For FY11, Wells Fargo is maintaining its EPS estimate of ($0.23), but for FY12 the firm is reducing its EPS estimate from $0.83 to $0.65. Revenue for FY11 and FY12 is forecasted to $1.737 billion and $1.878 billion.
For an analyst ratings summary and ratings history on CIENA click here. For more ratings news on CIENA click here.
Shares of CIENA closed at $11.95 yesterday.
The company is expected to release its Q4 results on Thursday December 8 before the opening bell. A conference call is scheduled with management at 8:30am EST.
The firm believes CIEN will report Q4 sales inline with expectations while earnings and margins fall below. Wells Fargo estimates $450 million in sales, EPS of $0.06, and gross and operating margins of 43 percent and 3.3 percent. The Street is currently forecasting earnings of $0.07 per share on $450.27 million in total sales for the quarter.
Due to the potential for weak spending from the company's key customers, like AT&T (NYSE: T), the firm is also cutting its Q1 sales and EPS estimates to $446 and $0.06, well below the Street's consensus of $458.61 million and $0.10. Wells Fargo also lowered its gross and operating margin estimates from 43.3 percent and 4.8 percent to 42.8 percent and 3.4 percent.
An analyst at Wells Fargo comments, "We believe Ciena continues to experience strong orders and win rates for its 40/100G transport, OTN switching and wireless backhaul solutions, which could drive improved financial performance as orders convert to sales in FY2012. Given our belief that nearterm challenges are in the stock, we continue to recommend Ciena shares."
For FY11, Wells Fargo is maintaining its EPS estimate of ($0.23), but for FY12 the firm is reducing its EPS estimate from $0.83 to $0.65. Revenue for FY11 and FY12 is forecasted to $1.737 billion and $1.878 billion.
For an analyst ratings summary and ratings history on CIENA click here. For more ratings news on CIENA click here.
Shares of CIENA closed at $11.95 yesterday.
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