Ciena: Anticipated Boon from Video-Related Network Buildout

Credit Suisse’s Paul Silverstein yesterday raised his rating on Ciena (CIEN) to Outperform from Neutral, citing expectations of above industry average growth “given its strong competitive position in the rebounding optical infrastructure market.”

Silverstein raised his price target on the stock to $36 from $29.25. His estimates for the October 2007 fiscal year increase to $715 million in revenue and GAAP EPS of 93 cents a share, from $710 million and 91 cents; for fiscal ‘08 he goes to $849 million and $1.29, from $830 million and $1.20.

“We expect to see further sustained increase in demand due to increasing bandwidth consumption and the concomitant need for network re-architecture driven primarily by increasing amounts of video on service provider and enterprise networks,” he writes. Silverstein notes that YouTube in 2006 generated as much traffic in 2006 as the entire Internet in 2000.

Ciena yesterday was up 60 cents at $28.89.