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Baird Downgrades Nortel to “Neutral”
By Mark Evans | July 31, 2006
Baird & Co. analyst Kenneth Muth has downgraded Nortel to a “neutral” from “under-outperform” due to concerns about spending trends by wireless and wireline carriers during the second quarter. Muth said he doesn’t expect Nortel to execute a turnaround as quickly as it anticipates despite efforts by CEO Mike Zafirovski to restore the company’s financial credibility and grow profit margins. “All of Nortel’s traditional and next-generation product initiatives face some key competitive threats,” he said in a research report. “If the company is unable to win major contracts with global incumbent carriers, its financials could be impacted negatively.” Muth, who doesn’t think Nortel can achieve its $1.5 billion in operating profit goal wouldn’t happen until 2009, also reduced his stock price target to $2 from $3.
Topics: Analyst Coverage |