Morgan Stanley Maintains Equal-Weight on Ciena

Morgan Stanley is out with its report today on Ciena (NASDAQ: CIEN), maintaining Equal-weight.

In a note to clients, Morgan Stanley writes, "We view Ciena as a cyclical stock whose performance is highly correlated to switching revenue and gross/op margin. However, we believe gross margin could remain under pressure going forward as competition in the transport market, which currently makes up 66% of revs vs 45% prior to the Nortel acquisition, continues to heat up as most recently commented on by Infinera. This leaves topline and cost cutting as the main drivers for op margin expansion."

Shares of CIEN closed Wednesday at $25.48, down 4.75% from Tuesday's close.