CIEN downgraded to SELL by
UBS
CIEN downgraded to SELL by UBS
Down 5% in the pre-market. Why are they lowering from $43 to
$31, what the hell?
"Ciena shares are trading lower after UBS downgraded the
company's stock from Neutral to Sell and lowered the price target
from $43 to $31."
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Jester + lt cap,
Yes, 'negative' doesn't begin to describe how hated CIEN just
became by UBS. Obviously, earnings on Dec. 12th will be critical -
either it will make UBS look foolish or prescient. If there's bad
news, I'd expect other analysts to pile on. If one wants a fairly
sunny take on CIEN, here's one from seeking alpha:
seekingalpha.com/ar...widget
I think it's been CIEN's own caveats in their last call that has
hampered the stock. But punishing it down to these levels? It's
tempting to buy but the boat is fairly loaded and UBS has spooked
me a bit.
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Author:
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Jam
ok
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Subject:
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News
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Sentiment:
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Neutral
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Date:
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12/06/19 at 12:57 PM CST
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Apparently the bad news that Arista Networks (ANET) delivered on
October 31st is now being blamed for also contributing to a slow
down on CIEN gear. The culprit is Facebook if I remember
correctly.
In ANET's case this led to a brutal day, its stock dropped from
$244 to $185 overnight.
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Author:
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LongTerm
CapGains
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Subject:
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News
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Sentiment:
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Neutral
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Date:
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12/07/19 at 4:43 PM CST
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lt cap,
Thanks for the contribution. I wonder what your take on how
relevant Arista is to CIEN's business - but I guess we'll find that
out on Thursday when they report. It's really kind of an
interesting case - We've got CIEN's note of caution from their
last CC, altho it was a great quarter, and we have UBS turning
deadly negative on the stock. And there is both the question
of price competition that may cut margins, and (I think) the
real rollout of 5g deployment is going to be a delayed, drawn-out
process that will take longer than people thought. One source
I read said that full deployment may occur by around 2025. If
all of that's true, and any part is hardily confirmed by the CC,
those of us in the stock are going to be sorely disappointed,
not
to mention hurt. If CIEN shows that a lot of these worries are
not sector-wide, well, figure it out: We've seen stocks in the
sector move 25% on good or bad news. 25% from about $35 would be
$7. Which would propel the stock to about $42 - whoopee - far below
the 15 or so (I'm using memory) analysts who rate the stock
'overweight', buy, or strong buy. So, you've got 15 bulls and 1
strong bear in UBS's sell. Is the guy prescient? He certainly has
the latest report. Or is he a fool? Clearly, the market is spooked.
I'm tempted to buy here and sell covered calls, as the stock seems
oversold to me. But the premiums aren't worth the downside
risk.
Funny that the market is in 'happy mode' with no trade deal in
sight, impeachment in the offing, and President Cheetos as
unpredictable and unknowledgeable as ever. But a stock like CIEN
that has actually been delivering the goods gets whacked after a
pretty darn good CC. Go figure. I think Apple has more risks, and
it's at all time highs.
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Author:
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Jam
ok
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Subject:
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News
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Sentiment:
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Neutral
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Date:
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12/10/19 at 1:44 PM CST
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I believe that Facebook slowing down purchases of equipment have
had a negative sales effect on Arista as well as Ciena. Not
sure there are any other connections between Arista and
Ciena. Arista is a direct competitor of Cisco, not so much
Ciena.
I presume the Facebook slowdown is for their Datacenters.
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Author:
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LongTerm
CapGains
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Subject:
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News
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Sentiment:
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Neutral
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Date:
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12/11/19 at 4:19 AM CST
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Wow, quite the turnaround in CIEN. Apparently it was down 3.5%
in the pre-market, now up 12%. I don't know what caused that
change, but no doubt the up move was fueled by Trump claiming (yet
again) that a big China deal is close, and the market believes him
(yet again).
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Author:
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Jester
Debunker
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Subject:
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News
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Sentiment:
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Neutral
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Date:
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12/12/19 at 9:06 AM CST
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CIEN expects to grow operating margin from current 13% to 16+%
over 3 years and predicts 20% eps growth per year. UBS jumped
the gun. And it also doesn't hurt that folks bit on Trump's
tweet.
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Author:
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breinejm
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Subject:
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News
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Sentiment:
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Neutral
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Date:
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12/12/19 at 11:20 AM CST
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This is what Barrons wrote on CIEN downgrade:
Ciena Stock Drops After Analyst Warns of More Trouble Ahead
By Alistair Bates Dec. 6, 2019 4:27 pm ET
UBS urged shareholders to sell their shares in
Ciena, causing the stock to drop 3.5%
Friday.
In a report released Friday, UBS analyst Tejas Venkatesh
justified his pessimistic outlook by citing what he believes are
signs of a fast-approaching downturn, something that could come as
a surprise to investors after two years of consistent
outperformance.
Ciena (ticker: CIEN) stock has gained 66% since the end of 2017,
while the NASDAQ
Composite has risen 25% and the S&P 500 has
advanced 18%.
Although the telecommunications-equipment company has seen
significant growth in revenue, this upward trajectory has been
driven in large part by Facebook’s (FB) heavy spending, Venkatesh
wrote. The social media service made up 13% of Ciena’s
revenue last quarter. However, Venkatesh warns investors should
expect this level of spending to decelerate and, with it, their
shares to lose value.
“We are especially worried that decelerating networking
spending at Facebook, which we believe was witnessed
in Arista and Corning’s results, could also
impact Ciena,” Venkatesh wrote in the note.
Arista Networks (ANET) stock plummeted in early November after the company
released low fourth-quarter guidance. Having posted revenue of
$654.4 million in the previous quarter, the company predicted that
sales could fall to $540 million to $560 million in the fourth
quarter. This was credited in a statement by CEO Jayshree Ullal to
a sudden and substantial decrease in orders from a “specific
cloud titan customer,” which is believed to be Facebook.
Venkatesh is apprehensive about spending cuts at U.S. telco
titan AT&T (T), as well as at Indian companies Jio and
Airtel, both of which have significantly reduced their capital
expenditures. Such a cut in customer spending would stilt revenue
growth and cause Ciena’s valuation to dive, Venkatesh
argues.
The analyst maintains that Ciena will fail to meet revenue
guidance for the January quarter and land below the Street
consensus of $828 million at $810 million.
Ciena stock dropped 3.5% to $35.02 Friday, as the S&P 500
and Nasdaq Composite have gained about 1%.
Email: Alistair Bates at alistair.bates@barrons.com
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Author:
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LongTerm
CapGains
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Subject:
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News
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Sentiment:
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Neutral
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Date:
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12/10/19 at 4:56 AM CST
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