This is the weekly recap of Wall Street analyst notes affecting key public companies across networking, retail, software and consumer services. Markets were closed on Monday for the Martin Luther King Jr. holiday.
Ciena Corp. (CIEN) - BofA lowers rating to Neutral, $260 price objective
On Tuesday, Bank of America reduced its rating on Ciena to Neutral and maintained a $260 price objective. The analysts point to an elevated valuation and potential backlog risk despite what has been an extraordinary revenue acceleration tied to hyperscaler spending.
Ciena's shares have surged to levels that reflect very aggressive growth expectations, trading near a 40x forward price-to-earnings multiple - roughly double the firm’s decade-long average. The rally is tied to hyperscaler demand that the note says pushed revenue growth from roughly 8% to an anticipated 30% in the first quarter of fiscal 2026, backed by a reported $5 billion backlog that underpins next year’s sales.
The research note highlights Ciena’s leadership in certain optical technologies, including scale-across deployments that are projected by the analysts to expand 11-fold to $808 million by 2026 and the company’s strength in 800G platforms. Ciena’s market share in cloud-provider spending is described as increasing from 18% in 2024 to 22% through the first nine months of 2025, while the firm’s RLS systems and WaveLogic 6 Nano running on a 3nm digital signal processor are said to give it a 50% foothold among cloud customers and an edge in power efficiency versus peers Cisco and Marvell.
But the note cautions that the very thing underpinning this run-up - a large backlog and outsized near-term growth - carries precedent for downside. The analysts recall an earlier cycle in which backlog coverage of revenues fell dramatically, declining from a level that had covered 96% of revenues before collapsing by 38%, an episode that coincided with a roughly 12% share-price drop. With shares now trading at a roughly 45x forward P/E at peak growth assumptions, Bank of America says the valuation already embeds a significant amount of optimism, and downgrades to Neutral leave room for only modest upside to the $260 target.
Ulta Beauty Inc. (ULTA) - Raymond James raises to Strong Buy, $790 target
Raymond James upgraded Ulta Beauty to Strong Buy from Outperform on Wednesday and increased its price target to $790, while nudging its fiscal 2026 earnings-per-share estimate to $28.60 from $28.51. The firm credits a slate of operational initiatives that it expects will lift growth and profitability after recent investments.
The analysts cite management changes, tweaks to the loyalty program, enhancements to digital channels, and new merchandising in Wellness and Marketplace categories as drivers of the sequel to last year’s rebuild. They also identify plans to deploy deeper data analytics, pursue agentic AI initiatives and begin limited international expansion as additional levers to expand earnings without relying on multiple expansion.
Raymond James frames the view as a progression from earlier investment toward harvest, where store operations, ecommerce and early global tests increasingly contribute to the top line. At the same time, the firm flags the usual retail hazards: intensifying competitive offers in beauty, the risk of U.S. demand weakening, margin pressure from rising costs, or unsuccessful rollouts in new markets. Despite these uncertainties, the brokerage sees Ulta’s dual exposure to premium and value shoppers and a strong loyalty base as supporting the upgrade.
Palantir Technologies Inc. (PLTR) - PhillipCapital initiates at Buy, $208 target
On Thursday, PhillipCapital began coverage of Palantir with a Buy rating and a $208 price target derived from a discounted cash flow model. The initiation follows a strong revenue and profitability showing that the analysts say supports a positive view.
The note projects group revenue rising 47% year-over-year to $4.2 billion for fiscal 2025, with commercial revenue accelerating faster at 51% compared with 43% growth for government sales. Net profit is highlighted as expanding about 1.9 times year-over-year. In the United States, which accounts for roughly two-thirds of Palantir’s revenue, growth is said to have accelerated by 66% year-over-year, helped by continued government-related spending as well as expanding commercial adoption.
PhillipCapital points to commercial deals roughly doubling in third-quarter 2025 amid product advances described as AIP and ontology capabilities that bolster enterprise productivity. The firm’s DCF that produced the $208 target applies assumptions including an 8.3% weighted average cost of capital, a 4.2% risk-free rate and an 8% perpetual growth rate. The coverage note also observes that Palantir trades at a forward P/E near 170x, below a cited 190x deviation comparator, which the analysts view as creating room for a re-rating should fundamentals continue to progress.
Starbucks Corporation (SBUX) - William Blair upgrades to Outperform
William Blair upgraded Starbucks to Outperform on Friday, with the upgrade tied to a recent rebound in domestic comparable-store sales and a forecast for margin recovery that should unfold over multiple years.
The bank points out that Starbucks posted its first domestic comparable-store sales gain in two years in the December quarter, setting the stage for a positive fiscal 2026 outlook. The more critical issue, in William Blair’s view, is margin restoration. Americas operating margins fell to 13.4% in 2025 from a peak around 20.8% and face headwinds from an expected roughly $500 million increase in labor costs next year.
William Blair is looking for details at Starbucks’ January 29 investor day and expects the company to pursue a combination of G&A reductions, productivity gains and modest same-store-sales improvement. Under a scenario that assumes global unit growth near 3% annually and low-single-digit comparable sales, the firm posits consolidated margins recovering toward 2023 levels by 2030 and a 15-20% compound annual growth rate for EPS over five years. The research note also highlights a pathway to a $140-plus share price by 2029 at a 30x multiple on more than $4.70 in EPS, implying a 10% annual unit-growth rate and upside if comparable sales accelerate more rapidly. William Blair frames current performance as a sales recovery that outpaces margin repair, with meaningful profit benefits arriving in earnest by 2027.
ProPicks AI note and subscription messaging
The week's wrap also references a model called ProPicks AI that evaluates CIEN among thousands of companies each month across a broad set of financial metrics to surface ideas based on fundamentals, momentum and valuation. The note promotes the model’s record of past winners and offers readers the option to learn whether CIEN appears in any current ProPicks strategies. A promotional line at the end of the week advertised a New Year’s sale offering 50% off.