Canaccord Genuity Morning Coffee on Alcatel-Lucent (ALU): Très Bon

FREE Breaking News Alerts from StreetInsider.com!

ALU Hot Sheet

Rating Summary:
6 Buy, 7 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
Up: 19 | Down: 16 | New: 82

Canaccord Genuity Morning Coffee on Alcatel-Lucent (NYSE: ALU): Très bon.

Canaccord analyst says, "Goldman Sachs upgraded Alcatel-Lucent, France’s biggest telecommunications equipment maker, arguing that profits from new businesses are overtaking losses from legacy units, offering investors potential upside. Among these new businesses is Internet protocol routing, in which the firm expects Alcatel to experience ongoing market-share gains from Cisco (Nasdaq: CSCO) as the latter migrates its customer base onto a new routing platform. Goldman also believes Alcatel will benefit from the push by AT&T (NYSE: T) to expand long-term evolution (LTE) coverage as a condition of its merger with T-Mobile (NYSE: DT), as Alcatel has been AT&T’s preferred provider of wireless infrastructure services in the past. All told, Goldman thinks that Alcatel’s business mix is “fundamentally improving” and that “Alcatel is becoming an attractive investment once again.”Itbelieves that a “fundamental improvement in earnings quality, along with strong earnings momentum,” should trigger a “re-rating” of the company’s shares, “unlocking material upside.” Profits from “structurally- attractive” next-generation technologies will contribute 18% of revenue and 40% of EBIT, growing to 26% of sales and 48% of EBIT in 2013. The firm is raising its 2012 revenue forecast by 3%, while increasing its EPS estimate by 48%; for 2013, it’s ratcheting up its revenue forecast by 6%, with profits increased 68%. It maintains above-consensus estimates for 2011, 2012 and 2013, reflecting share gains in IP routing and sustained growth in the U.S. wireless equipment market."

Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!