Goldman Sachs initiated coverage of Ciena (CIEN ) with underperform.
Analyst Brantley Thompson says his underperform rating is based on the belief that optics alone doesn't drive incremental shareholder value. He thinks Ciena's success will have greater dependence on a successful M&A strategy. Ciena makes optical switching gear for high-speed Internet.
He sees a 10% chance of an upside in the stock, and 40% chance of a downside. He also sees a 44-cent fiscal 2003 (Oct.) loss, and a 35-cent fiscal 2004 loss.