Ciena Corporation is set up for solid earnings in the coming quarters, which could add meaningful gains to shares of the company, according to Morgan Stanley. The firm upgraded the stock to overweight from equal weight and boosted its price target to $65 from $56 in a Friday note. The new price target represents a more than 22% increase from where shares of Ciena closed Thursday at $52.89. The upgrade comes as supply chain issues for the software company bottomed out in the second quarter and look to improve in the back half of the year. "They have over $4bn of backlog, a relatively healthy service provider spending environment as investment in high-speed networks continue, and are share gainers as they finally deploy new deals," analyst Meta Marshall wrote. Those new deals should also boost gross margins and make outsized growth compared to the industry more achievable for Ciena, according to the note. "As these deployments get underway, we are mindful that gross margins are not likely to achieve FY20/FY21 levels; however, operating leverage gained from that time period can continue to generate double digit earnings growth in the coming years," said Marshall. Of course, risks to Morgan Stanley's base case remain, especially if Ciena doesn't meet the outlook its given for investors for the year. In its latest earnings release, in June, the company's earnings and revenue both came in short of Wall Street consensus. "We could be too optimistic if challenges in achieving FQ4 outlook reduces investor confidence in the name, particularly after two quarters of outlook disappointment," Marshall said. Still, given the pent-up demand the firm sees for high-speed networks and less risk of supply chain issues going forward, the firm sees now as a time to reconsider Ciena.