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Credit Suisse Down on Nortel
By Mark Evans | September 15, 2007
It’s interesting to see analysts have dramatically different views on the prospects for a company’s stock.
Earlier this week, UBS analyst Nikos Theodosopoulos published a report that questioned why investors were under-valuing Nortel - a stock he believes is worth $34. It’s certainly a bullish approach at a time when Nortel shares have been declining, and investors have had to digest disappointing news (lower sales in 2007 due to fewer than anticipated orders in North America) from Lucent-Alcatel recently.
In contrast to Theodosopoulos’ optimism, Credit Suisse analyst Paul Silverstein has decided to maintain his “underperform” rating on Nortel while reducing his earning estimates and his 12-month stock price target to $16 from $17.
In a research note, Silverstein said Nortel continues to suffer from high exposure to the legacy product markets (aka older technology) amid challenging carrier capex growth and pricing environments. He suggests the outlook for Nortel’s revenues in Q3 and Q4 is trending lower than the guidance due to the ongoing weakness in CDMA wireless sales.
Topics: Analyst Coverage |