Raymond James raises Ciena stock price target on supply visibility

Raymond James has raised its price target on Ciena Corp. shares to $600, up from $530, while keeping an Outperform rating. Despite a recent 11% drop in the stock price to $314.56 over the past week, Ciena has posted a remarkable 274% return over the last year. The firm praised the company's Q3 fiscal 2026 results that beat expectations and the increased visibility into fiscal year 2027.

Ciena's management revealed a baseline revenue forecast of $8.3 billion to $8.4 billion for fiscal 2027, with potential upside contingent on securing more supply. The firm emphasized that the focus should shift from the durability of demand to execution and supply constraints. Ciena's backlog is projected to surpass $10 billion by the end of fiscal 2026 and continue through 2028.

The investment firm highlighted various growth opportunities for Ciena, such as optical systems, coherent pluggables, HyperRail, and scale-up/CPX products. Operating leverage is anticipated to accelerate earnings growth more rapidly than revenue growth. Ciena's PEG ratio of 0.33 indicates a favorable growth-to-price ratio relative to its earnings multiple, although InvestingPro analysis suggests the stock may be overvalued.

Raymond James has revised and extended its estimates through 2028, but notes that there are no immediate catalysts for the stock price. The firm maintains its Outperform rating, indicating continued confidence in Ciena's prospects.