UBS Drops Target Price to $11

By Mark Evans | Published: February 28, 2008

UBS Securities has jumped off the Nortel bandwagon, dropping its stock price target to $11 from $15 amid disappointment that the company’s business transformation is “slower than expected”.

In a research report, UBS analyst Nikos Theodosopoulos said Nortel needs to have a more narrow strategic focus:

Nortel’s “Broad based strategy likely makes the road to recovery tougher. We continue to believe Nortel needs to increasingly focus on fewer areas where it can gain a competitive edge and meaningful scale. Our preference is to see an increased focus in Metro Ethernet and Enterprise, at the expense of 4G wireless where we believe Nortel will struggle. We continue to remain on the sidelines.”

More: Check out the National Post’s Trading Desk for additional post-results coverage.

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  • http://jtrinkle.zenfolio.com FormerNortel

    I am not sure I would want UBS doing my financial planning because I think $11 is a very high target with the way things are looking. Even thought Nortel would have shown a profit without the tax write-off the US economy if not in a good position for any company to make a turn around now. Now with more layoffs on the way employee enthusiasm will fall even lower. No one wants to do business with a company where the prices are like buying a new Aston Martin, the support is atrocious and the products are built like a Yugo.

  • The psychiatrist

    “UBS Securities has jumped off the Nortel bandwagon, dropping its stock price target to $11 from $15 amid disappointment that the company’s business transformation is “slower than expected”.

    Why is it a surprise to so many, when after all the one who is pulling the bells and whistles is the one who stated when he took over as CEO that it would be “3-5 years to recreate a great company”

    Evidently we have everyone from analysts to jounalists advising on what Nortel should do going forward.

    armchair warriors anyone?

  • The psychiatrist

    “UBS Securities has jumped off the Nortel bandwagon, dropping its stock price target to $11 from $15 amid disappointment that the company’s business transformation is “slower than expected”.

    Why is it a surprise to so many, when after all the one who is pulling the bells and whistles is the one who stated when he took over as CEO that it would be “3-5 years to recreate a great company”

    Evidently we have everyone from analysts to jounalists advising on what Nortel should do going forward.

    armchair warriors anyone?

  • Nortel_will_survive

    Let's get a simple fact straight. Nortel's Net Loss was $844 Million. The Tax Write Off was $1.1 Billion. The difference is $256 Million which would have been recognized as profit without this tax write off event.

  • Observer

    Lets examine Niko's statement. He's saying if Nortel focuses on a few areas they can instantly become competitive. Pray tell how is this supposed to happen in a slowing economy ? Wouldn't only having one or two core competencies in a slowdown actually be WORSE if those one or two areas slowdown as well ? The truth of the matter is there is no telling how technology will play out after the slowdown. In the meantime Nortel should continue to HEDGE their bets and see how the landscape turns and see which of their bets wins big. This is what any good financial advisor would tell anyone right Niko ?

  • Another Nortel Watcher

    Psychiatrist – we're 3 years into that grand plan and instead of progress towards the goal of a $65 stock price, we're sitting at an $8 stock price. I don't think it's appropriate to refer to the posters as armchair warriors. We're more like witnesses to a car crash.

    …and it's going to get worse.

    WHERE IS THE BOARD AND WHY DON'T THEY ACT?!!

  • Another Nortel Watcher

    Mark, this Disqus software is crap. I still get the snoopy failure every time I come here and now thread posts are being inserted in random order. C'mon, do you have equity in Disqus? Dump it and get back to something better or risk losing the audience.

  • http://jtrinkle.zenfolio.com FormerNortel

    Psychiatrist – I worked for Nortel till March last year and I can tell you when I quit it was going further south each day. Nortel nearly lost the Verizon account due to poor work from the field installation teams because they were all contractors and no accountability. Nortel is only a name and their product has become the Chrysler of the 70s. Everything is broke when it arrives and if you have to call for support you had better buy few copies of Rosetta Stone so you can understand who you are talking to. I remember a job where there were some problems with a possibility of 2 different pieces of equipment and we needed support part of the product was supported out of India and the other in Turkey. After several hours the customer was not happy. I see no reason there is any future for Nortel maybe you have a lot of stock and you keep telling yourself it is going to get better but there is no reason to believe it is going to.

  • Anonymous

    I second the motion.

  • http://wj.com someone

    I third the motion

  • many

    Third

  • oneof34kleft

    well said “D”.

    i mean formernortel

  • Apple

    Accounting is a complex issue.
    You can't use one side of the balance sheet and neglect the other side.
    Nortel was warned many times and fined by SEC for accounting not tied to GAAP.
    SEC vs NT accountants trials are coming. SEC charged them with cooking the books, with accounting fraud.
    RCMP is ready to lay criminal charges too.
    Yet you and Nortel try to spin a good view of bad numbers.
    Operational margin which Nortel reported is not GAAP!
    and yet managers bonuses are measured by that!
    Yes, Mike Z will get better operational margins, he will get bonuses but Nortel stock will go to the drain losing employees and customers.
    Just look how Mike fixed handset division at Motorola. He squeezed all the juice from the organization and the plant is dying now. If he were an honest manager he would still be there taking care of handsets. He quit there just to get more money here! Even the signatures he left on the deals of separation with Moto are not important for him. So why he signed them?
    In conclusion
    Accounting is simple, just stop creating and cooking the numbers!

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  • hudsonbar

    Can i have more info on this ?

    Regards

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