UPDATE - Nomura Securities Initiates Coverage on CIENA (CIEN) with a Buy; Compelling Story of Operating Leverage

UPDATE - Nomura Securities initiates coverage on CIENA (NASDAQ: CIEN) with a Buy. PT $20.00.

Analyst, Stuart Jeffrey, said, "A compelling story of operating leverage and a pure-play in optical transmission. Profile of growing technologies drives our forecast of 11% revenue 3-yr CAGR (vs. overall market at 3-5%). Scale benefits from the NT transaction should expand EBIT margins from 0% in FY12 to 8.5% / 11.5% in FY13E / FY14E vs. Street at 6.5% / 7.5%, respectively. Valuation is compelling at 6.9x EV/EBITDA in CY13E and 4.5x CY14E. We initiate with EPS estimates above consensus at $1.44 / $2.42 for FY13 / FY14 vs. Street at $0.86 / $1.14, respectively. Street estimates maybe skewed by convertible bond dilution, tax rate and limited broker estimates for FY14."

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