Ciena’s shares rise
NEW YORK (AP) – Ciena Corp.’s shares rose Tuesday after a Credit Suisse analyst raised his rating on the telecommunications equipment maker, predicting better-than-expected revenue growth.
The stock rose 78 cents, or 6.7 percent, to $12.41 in premarket trading.
Analyst Paul Silverstein upgraded the company to "Outperform" from "Neutral" in a client note Tuesday and lifted his price target to $19 from $15.50.
Short term, Silverstein said he expects the company's revenue growth to outpace expectations as wireless providers make upgrades to their networks. He forecast revenue of $1.5 billion for fiscal 2010, which ends for the company in October. On average, analysts expect $767.4 million, according to Thomson Reuters.
Over the long term, Silverstein said Ciena's planned acquisition of Nortel Networks Corp.'s global optical networking and carrier Ethernet businesses for $530 million should make it more competitive. Last month, Ciena won court approval in the U.S. and Canada to buy the assets from Nortel, which is selling off businesses under Chapter 11 proceedings.
Silverstein acknowledged that integrating the new assets will not be a "trivial" job, but said, "The acquisition has meaningfully improved Ciena's competitive position."