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RBC Slashes Target Price
By Mark Evans | September 8, 2008
RBC Capital Markets analyst Mark Sue has reduced his target price on NT to $6 from $8, suggesting that tougher economic times could make it more difficult for IT managers to wander away from incumbent enterprise network equipment suppliers - making it tougher for Nortel to attract business. (Source: MSN Money)
In July, Sue said that Nortel could hit $18 by 2011 if everything went according to plan. Clearly, things aren’t currently going as well as planned.
Hat tip to Barron’s Tech Trader Daily for Mark Sue’s thoughts on the downgrade:
“An increasingly difficult macro environment may be making IT managers stick with their incumbent enterprise networking vendor, making it difficult for Nortel to increase its presence with large corporations. Combine this with overall expending sales cycles and Nortel may face headwinds as it looks to reach its near-term financial targets.”
Sue reduced his Q3 revenue estimate to $2.55 billion from $2.66 billion, while he expects revenue in 2008 will decline by 1% (compared with Nortel’s forecast of low single-digits).
“Macro challenges, the problems at Sprint (S) and the lack of urgency from carriers such as Verizon may make top-line growth this year difficult,” he said.
More: Market Intelligence Center has some more thoughts on Nortel, which touch a 52-week low of $5.41 earlier in the day.
Topics: Analyst Coverage |