Ciena Benefits From Telecom And Cable Capex Trends, Says MKM Partners

Strong capex trends among U.S. service providers and strength in the Indian and Chinese telecom markets could drive Ciena Corporation CIEN sales in 2018, according to MKM Partners. 

The Analyst

Michael Genovese of MKM Partners reiterated a Buy rating and $28 price target on Ciena shares.

The Thesis

Combined capex in the U.S. telecommunications and cable sectors is expected to grow by 9 percent in 2018, led by Sprint Corp SCenturylink Inc CTL and AT&T Inc. T. This growth is expected to drive orders of communications equipment, Genovese said in a Tuesday note. (See the analyst’s track record here.)

“We believe there is order strength in the business at Verizon Communications Inc. VZ, in the cable market, in the hyperscale DCI space and in parts of Asia, including India," the analyst said. 

Ciena is one of the more well-positioned companies that could capture some upside as the telecom and cable sectors increase capex spending, he said. 

“In this very strong capex environment, we prefer telecom systems names that are directly exposed to service provider spending.”

Price Action

Ciena Corp. shares were up 0.23 percent at $23.74 at the time of publication Tuesday afternoon. 

Related Links:

Altice, T-Mobile, AT&T Would Benefit From Tax Reform, HSBC Says

T Mobile's Layer3 TV Acquisition Is Scaring The Telecom Space

Posted In: Michael GenoveseMKM PartnersAnalyst ColorPrice TargetReiterationAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.