Mark Sue Downgrades NT

By Mark Evans | Published: October 6, 2008

Declaring that “Public equity investors have mostly given up on the company”, RBC Capital Markets analyst Mark Sue has downgraded Nortel to “underperform” from “sector perform”, while slashing his target price by 50% to $2.

Sue said tough credit markets, the prospect of slower economic growth and increasing scrutiny of carrier spending could make if difficult to Nortel to “execute its turnaround plans”.

Sue is also concerned about Nortel’s $4.5-billion of debt, and the fact it has been free cash flow negative so far this year and in seven of the last ten quarters. As well, he believes the decision by Nortel to sell its metro Ethernet network business could not have come at a worse time.

A month ago, Sue reduced his NT target price to $6 from $8, citing more difficult economic conditions. In July, he was musing about Nortel hitting $18 if everything went according to plan.

Update: Barron’s Tech Trader Daily reports that RBC also downgraded Garmin, Ericsson, Alcatel-Lucent, Symmetricon and DSP Group.

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  • oneof34kleft

    mark sue????? who is he…. oh-ya some one who can predict a stock price after it reaches that point.
    tho what he is saying maybe true, but after the fact is like a bad news paper reporter. days late…

  • Texan

    Mark Sue and RBC should be investigated for playing on investor sentiments to his own gain. SEC should as a minimum look into trading pattern of RBC over the past few months to see if they stand to gain more or lose more from this downgrade of all telecom stocks (NT, ALU, ERIC) on a day when global markets were already shaky.

  • Should have Sold in Feb 2004

    As with most NT analysts…reacting to something that is obvious or after it happens. None of them can be trusted. People are losing millions because of their biased, self-serving predictions.

    Yes, all NT analysts should be investigated by the SEC and the pathetic OSC.

  • ex-Nortel

    Over the past 2 years, Mark Shue has demonstrated that he has the same grasp of the internetworking business as Mike Z. Nortel has been the walking dead for the past 2 years and most insiders in the internetworking business recognized that salient fact.

  • exnt2

    idiot. just about as much credibility as the company he covers.

    RBC = Royal Bullshitting Conmen

  • protospherical1

    I wonder why revisions always reflect a target higher that what it currently trades at.
    No wonder they have been wrong all these years.

  • notafan

    NT share prices and Mark Sue's analysis have been creating this massive negative synergy. Sue sets a low target –> NT share prices fall –> Sue “corrects” his target with bunch of new excuses he discovers —> NT share prices fall more… It's been a vicious cycle. I think Sue knows he's definitely having an effect on the share prices but I guess he wants to cover his ass first.

  • puddintane

    “As a casualty of Wall Street's ongoing turmoil, Nortel stock lost 10% of its value by the closing sound of today's trading bell.”

    Ah, now, don't be blaming it all on “Wall Street” cuz I'll invariably counter with “global warming”.

  • notafan

    NT share prices and Mark Sue's analysis have been creating this massive negative synergy. Sue sets a low target –> NT share prices fall –> Sue “corrects” his target with bunch of new excuses he discovers —> NT share prices fall more… It's been a vicious cycle. I think Sue knows he's definitely having an effect on the share prices but I guess he wants to cover his ass first.

  • puddintane

    “As a casualty of Wall Street's ongoing turmoil, Nortel stock lost 10% of its value by the closing sound of today's trading bell.”

    Ah, now, don't be blaming it all on “Wall Street” cuz I'll invariably counter with “global warming”.

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