Robert W. Baird analyst Ken Muth has reduced its target price on NT to $1 from $3, while maintaining its “neutral” rating.
In a research note, RB said Nortel will likely to burn through $813 million of cash in 2009, while reducing its EPS estimates for FY08 and FY09 from -$0.06 to -$0.25 and from $0.20 to -$1.40, respectively.
In an interview with the News & Observer after the third-quarters results were released, Muth said:
“They’re breaking up the company to sell the pieces, that’s the reality. The question is: Can they get those sales done before they run out of money?”
How do we take this seriously? If the stock drops to 50 cents, do the analysts cut their target to 50 cents? If the stocks goes up to 1.50, do the analysts raise their target to 1.50? Does anyone see a pattern here?
Why even have any target price? The consenus in the media and from the brokers is that this company is going to run out of money and will cease to exist within a year so would that not mean that the target is zero?
exnt
I..great budding analyst that I am..have a price target of 0.86. Hey, we reached that today! Boy am I smart! These analysts kill me..after the bad news is all out..they lower their targets. Why does anyone pay attention to them?
Nortel watcher
Mark,
I chose this blog article with just 2 comments on it to petition you for a new blog article you can debut at your convenience.
Given the directional change at Nortel from a centralised, matrix-like structure to a decentralised, business unit structure divulged during the Q3 c/c, it seems logical that the Executive Leadership at Nortel will change as we know it today.
We have in the blog audience a wealth of current employees that can provide valuable commentary on the benefits, drawbacks and behind-the-scenes politics of the new operating structure that could make the difference between survival and BK for Nortel one year from now.
Since the BUs will be three: Carrier, MEN and Enterprise led by Lowe, Morin and Hackney, respectively. And, Edwards leaves his EMEA president post to lead the Sales network serving the first two – Carrier and MEN. Some obvious questions arise such as:
What happens to the rest of the Executive Leadership in the lower rungs like Edwards counterparts in China, Asia-Pacific, CALA, etc.
Is Michael Pangia gone or playing a different role in the new structure?
What value do Carey and Flanagan bring to the BU structure?
What are the strengths and weaknesses that Lowe, Morin, Hackney and Edwards bring to their respective BUs?
Should someone else have filled those roles and who would that have been?
I hope you agree, Mark, that there may be blogging value in the above.
exnt2
I had forecasted Nortel is on track to meet Extremes market share having gone past Ciena, Tellabs. At the time of posting Nortel was 900 million then 600 million. So it will now start heading to around 50 cents. only 200 million to go.
street rumor on MEN going to Ericsson????? any comments?
http://www.docstoc.com/search/dennis-carey Dennis Carey
thanks for the post
http://www.docstoc.com/search/dennis-carey Dennis Carey
Robert Baird Cuts Target Price
Robert W. Baird analyst Ken Muth has reduced its target price on NT to $1 from $3, while maintaining its “neutral” rating.
In a research note, RB said Nortel will likely to burn through $813 million of cash in 2009, while reducing its EPS estimates for FY08 and FY09 from -$0.06 to -$0.25 and from $0.20 to -$1.40, respectively.
In an interview with the News & Observer after the third-quarters results were released, Muth said:
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