Evercore ISI analysts upgraded Ciena (NYSE:CIEN) to Outperform from In Line in a note Friday, raising the price target to $57 from $52 per share.
Analysts told investors that their firm sees CIEN as a "premium asset at a discount price."
"We are upgrading Ciena to Outperform as we think the recent earnings report has sufficiently reset expectations and enabled a path to beat and raise as we go through FY24," wrote the analysts.
"We think cloud and India revenue growth can offset any weakness with North American service providers, which could enable an upside path to 5% revenue growth in FY24 (vs guide of 1-4%)," they added. "We also see potential for around 200bps of gross margin expansion driven by better mix and lower supply chain related costs (vs. their guide for ~45% GM in FY24)."
Overall, Evercore ISI believes Ciena remains a "very attractive asset as the best-in-class optical vendor," and they think the current setup is sufficiently derisked.
The Stock should work higher as we go through the year on a series of beats and raises coupled with multiple expansion, according to the firm.