JPMorgan Bullish on Ciena (CIEN) Ahead of 100G Optical Upgrade Cycle Later This Year

Shares of Ciena Corp. (Nasdaq: CIEN) are holding onto positive territory into Wednesday's close despite a large sell off in the broader stock market. While shares of Ciena are up 0.5 percent to $16.38 at last check, the Dow and Nasdaq are down 100 points and 42.5 points, respectively.

Traders are cheering an earlier upgrade from JPMorgan's Rod Hall. The analyst raised his rating on the stock from Neutral to Overweight and his price target from $15 to $20.

The analyst cited expected solid capex from service providers during the second half of this year. Hall believes the 100G optical upgrade cycle will begin during the last quarter of this year and accelerate through 2013. He is modeling for the optical market to grow by 7.5 percent to $14.26 billion this year and by 10.9 percent to $15.82 billion next year.

Hall raised his FY13 sales estimate to $2.22 billion and his earnings estimate to 95 cents per share. The Street currently expects FY13 sales of $2.06 billion and EPS of 89 cents.

The firm's raised price target on Ciena shares implies potential upside of about 22 percent from where the stock is currently trading.

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