Morgan Stanley Upgrades Ciena to Equal-weight

Analyst Alkesh Shah upgraded the maker of networking systems on valuation

Morgan Stanley upgraded Ciena (CIEN ) to equal-weight from underweight.

On Thursday the maker of networking systems posted a 7-cent third-quarter loss and forecast flat fourth-quarter revenue. Analyst Alkesh Shah says he upgraded after the stock's signficant underperformance. He notes at yesterday's close, the stock was down 70% year to date, compared to a 9% decline for the group, and trades in-line with his discounted cash-flow fair-value estimate, and below cash per share ($2.38). Shah says the risk/reward to the stock is balanced in his opinion, and he expects shares to trade in line with the group. He sees a 34-cent 2004 loss and a 19-cent 2005 loss per share.

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