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Ciena Corporation (NASDAQ: CIEN), the optical components maker, has gotten hit pretty hard during this correction. The stock has dropped from $32 in late February and is trading around $26 today, almost a 20% drop.This morning, RBC Capital Markets upgraded the stock to Outperform and set a $33 target price. The reasoning for the upgrade is expected stronger demand for its products due to high video and data traffic. The RBC report cited industry growth is expected to jump to $14.5 billion by 2009 up from $10.9 billion in 2006. If Ciena continues to grow faster than the market, that is good news for Ciena and its shareholders.
At Verizon Communications Inc (NYSE: VZ), a large customer, business is expected to be down, but growth from British Telecom, AT&T Inc (NYSE: T) and MCI may offset the decline, the report suggested.
Ciena's sell off is too much too fast. I'd suggest using the stock weakness to pick up some shares.
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