CIENA (CIEN) PT Raised to $60 at Rosenblatt

Rosenblatt analyst Mike Genovese raised the price target on CIENA (NYSE: CIEN) to $60.00 (from $54.00) while maintaining a Neutral rating.

The analyst commented: "Ciena delivered inline 2H24 results and guidance, and aspects of the 3Q report were better than our preview. Namely, it looks like orders were closer to $1bn in 3Q, versus our $950mn forecast, and almost all the Cloud orders that came in during 3Q can be shipped for revenues in 4Q. This suggests backlog should be ~$2.0bn exiting FY24, and, at a minimum, Ciena should be able to grow in FY25 driven by further backlog draw down. The company also says it expects some U.S. Telco order improvement in 4Q24 and 1Q25, driven by Optical, Routing and Broadband Access projects, although management is more cautious than before on the timing of International Telco demand improvement. We are introducing FY26 EPS at $3.01 and increasing our price target to $60, based on 20x EPS. In our view, a 20x multiple for CIEN is already an AI-driven multiple. For our Neutral rating to wrong, we would need to see FY26 EPS move up towards $4 per share. However, before getting there, we still think the company has to deal with the FY25 guidance issue, and has to see significantly more demand improvement from Cloud and Telco customers."

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