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JP Morgan Upgrades NT
By Mark Evans | June 12, 2008
In the wake of yesterday’s news - Nortel focused on LTE and dropping Wi-Max, and management confirming the 2008 financial outlook - you knew it was only a matter of time before the analyst upgrades started to emerge.
JP Morgan appears to be first out of the game as Ehud Gelblum upgraded Nortel to “overweight” from “neutral”, suggesting that the company will have stronger operating margins and better sales during the second half of the year. The upgrade is particularly noteworthy given JP Morgan has rated Nortel as a “neutral” for the past four years.
Gelblum said Nortel should have operating margins of 10% over the next one to two years due to lower expenses and its Wi-Max partnership with Alvarion, which was unveiled yesterday. He also said Nortel’s Metro Ethernet unit will see better profitability as sales of a new networking product climbs during Q3 and Q4.
In late-morning trade, Nortel shares have jumped $1.03, or 11.2%, to $10.23 - the highest level since February, 2008.
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