The inability to get a firm grip on the actual run rate of revenues for the Nortel MEN group makes the stock a hard one to call, according to Auriga, which lowered earnings estimates on the company, while maintaining a "Hold" rating on them.
Auriga said, "Despite the near-term hurdles with respect to the macro environment and the pending launch of the 5400 platform, we recognize that successful integration of the Nortel assets is far more important to the stock. Given that our proprietary checks continue to suggest solid execution on this front, we are tempted to get more constructive on the name. However, we worry that a top-line reset may create significant pressure on the stock. Lack of visibility on the "true" run rate of revenues for the Nortel MEN group makes CIEN a challenging stock call."
Auriga also said they see the company reporting lower than estimated earnings in their next quarterly report.
Ciena closed Wednesday at $15.48, gaining $0.26, or 1.71 percent. Auriga has a price target of $14 on them.
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