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Umiastowski Goes Bullish on NT
By Mark Evans | January 16, 2008
TD Securities analyst Chris Umiastowski has gone bullish on Nortel - a week after Scotia Capital’s Gus Papageorgiou came out with a $30 stock price target.
Umiastowski upgraded NT today to “Action List Buy” from “Buy”, while maintaining his target price at $28.
Here’s his reasoning for the move:
“After rallying with its strong Q3 results, Nortel’s stock price has been under pressure ever since. We believe that the company is showing much improved financial performance and expect that improvement to continue when Nortel announces its Q4 results. We view the recent sell off as an attractive buying opportunity and have upgraded Nortel to Action List BUY.”
“Nortel’s price to sales ratio is at a five-year low. Nortel currently trades at about 0.5-0.6x the twelve-month forward consensus sales estimate. For the
last few years, this ratio has typically been around 1x. The last time Nortel traded this low on a price to sales basis was the fall of 2002 when there were legitimate concerns for the company’s survival. We certainly don’t have those same concerns today and believe that this valuation metric should rise.”
So, who’s next to jump on the NT bandwagon?
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