Evercore’s upgrade follows Ciena’s new three-year targets, which call for sustained revenue growth and significant margin expansion through fiscal 2029.
- Evercore raised its target for CIEN to $550 from $375, implying a 58% increase from the current level.
- The firm called data-center connectivity an “increasingly critical gating factor” for the monetization of frontier LLMs.
- Evercore expects 30%+ sales growth, 35%+ EPS growth, and $25+ EPS by FY29.
Ciena Corp. (CIEN) was in focus on Monday morning after Evercore ISI upgraded the stock to ‘Outperform’ from ‘In Line,’ raising the price target to $550 from $375, implying 58% upside from the current level.
The firm said connectivity both within and between data centers is becoming an “increasingly critical gating factor for frontier LLM monetization", adding that it is an attractive way to gain exposure to the optical networking space that is quickly emerging as a critical bottleneck in the AI buildout.
The firm believes Ciena can sustain more than 30% sales growth and more than 35% earnings per share (EPS) growth, potentially allowing the company to reach or exceed $25 in EPS by fiscal 2029, per TheFly.
Ciena Targets 30% Revenue Growth Through 2029
Evercore’s call follows Ciena’s Investor Forum last week, where management laid out a three-year financial framework targeting approximately 30% compound annual revenue growth from fiscal 2026 through 2029, an adjusted gross margin of roughly 50%, adjusted operating margin of 32% to 35%, and free cash flow margins of around 20%.
The outlook is backed by a differentiated portfolio, growing customer demand, expanding supply capacity, and new addressable markets, said CFO Marc Graff. He added that Ciena will also reorganize its reporting into Optical Systems, Interconnects, Global Services, and Routing and Other beginning in fiscal 2027.
The growth targets follow a strong fiscal third quarter (Q3), when Ciena reported $1.67 billion in revenue, up 37% year over year, while adjusted EPS increased 215% to $2.11, beating FiscalAI's consensus estimate. The company also raised its fiscal 2026 revenue outlook to $6.42 billion, plus or minus $50 million.
Street Raises Targets After Ciena’s Investor Forum
Other analysts also turned more constructive following Ciena’s Investor Forum. Northland raised its target to $550 from $500 and maintained an 'Outperform' rating, citing the company’s 30% revenue-growth target, margin expansion, and $25-plus earnings potential, according to TheFly.
Meanwhile, Barclays raised its target to $548 from $475, maintaining an 'Overweight' rating, and Rosenblatt reiterated 'Buy' with a $525 target, noting “clear upside” following the new fiscal 2029 framework. Morgan Stanley also lifted its target to $450 from $425 and kept 'Equal Weight', saying it “walked away more positive” from the event, per TheFly.
Retail Sentiment Around CIEN Stock
On Stocktwits, retail sentiment around CIEN stock remains ‘neutral’.
So far this year, the stock has rallied a little over 41%. In comparison, the Vanguard Morningstar Mid-Cap Growth ETF (VOT), which holds CIEN stock, has risen nearly 4% over the same period.
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