Ciena closed the week at $354.92, still 31% below the Street's mean price target, but the analyst picture took a fresh turn on Wednesday when Bernstein initiated coverage with an Outperform rating and a $440 target.
The initiation matters in context. A week ago, this note documented Evercore ISI's upgrade to Outperform and a target lift to $550, the most aggressive call since the September 3rd earnings sell-off. Barclays had reinforced that direction days earlier, raising to $548. Now a third firm is entering the bull camp from scratch. The consensus sits at 10 buys and 5 holds, with a mean target of $516.83. At Tuesday's close, that gap represents roughly 46% implied upside. The bulls are pointing to Ciena's FY29 revenue framework of around $14 billion, a near-doubling of the optical networking TAM to $52 billion by 2029, and WaveLogic 6 Extreme's technical lead over 140Gbaud competitors. The bear case is more sceptical about timing: inference-driven bandwidth demand has not yet translated into proportionate traditional optical transport spending, and the FY28 EPS estimate of $16.32 at a 32x multiple leaves little room for execution slip.
Morgan Stanley remains the notable holdout among bellwether names, sitting at Equal-Weight with a $450 target raised from $425 on September 17. That target sits well below the Evercore and Barclays levels, reflecting a view that Ciena's longer-dated growth vectors depend on adoption of newer architectures and easing supply constraints that the firm does not want to get ahead of. The PE ratio has compressed around 25% over the past 30 days to 33.4x, and EV/EBITDA has pulled back to 24.1x. Both moves track the post-earnings sell-off in early September rather than any fresh deterioration.
Short interest is not the story here, but it has been edging up. Bears added roughly 13% to their position on a week-on-week basis, bringing short interest to 2.6% of the free float. That is a low absolute level, and borrow is essentially free at 0.42% cost to borrow. Availability in the lending pool is essentially unlimited, so there is no squeeze dynamic in play. The ORTEX short score of 31 ranks in the 71st percentile for days-to-cover, but the overall read is that positioning is thin and tactical rather than structurally bearish. Options traders have moved in the opposite direction from the short sellers: the put/call ratio dropped to 0.70 on Tuesday, below its 20-day mean of 0.75, a mild shift toward calls that aligns with the improving analyst tone.
One institutional data point worth noting: JPMorgan Chase's 13G/A filing in September showed its disclosed stake falling from 7.7% to 3.9% of shares, dropping below the level that requires ongoing disclosure. That is a meaningful reduction in custodial or proprietary holdings, though the activist register contains no 13D filer, and all disclosed large holders are passive. FMR LLC holds 13.4% and remains the largest reported holder, with Vanguard and BlackRock each adding modestly in recent months.
The buyback picture from ORTEX Alt Data adds a note of caution. Ciena's remaining buyback authorisation fell 36% year-on-year in Q1 and has declined for three consecutive quarters, now sitting at $589.8 million. That is not a crisis, but it does suggest the company is absorbing cash elsewhere, consistent with the supply-constrained ramp narrative management has outlined for FY27.
The next earnings event is December 10. Between now and then, the main question is whether fresh Bernstein research and sustained Evercore momentum draw more buy-side attention back to a stock still trading at a meaningful discount to where the Street thinks it should be.
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