Piper Jaffray Downgrades Novatel Wireless (NVTL) to Sell
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Piper Jaffray downgrades Novatel Wireless (NASDAQ: NVTL) from Neutral to Sell and lowers their price target from $8 to $6.
The firm also lowers their 2008 pro-forma EPS estimate from $0.70 to $0.35 and their 2009 pro-forma estimate from $0.79 to $0.58 "based on higher expenses due to its ongoing accounting review, slower ramp of new product revenue and intensifying competition."
Piper Jaffray highlighted that the company had disappointing Q208 results and guided to a weaker Q308. It cited "intensifying competition in several of its key markets, continued transition of its product portfolio, and lack of near-term catalysts" as the reason for the downgrade.
In addition, the firm believes "operating margins will remain under pressure as management continues to invest in its next generation of products and incurs additional expenses resulting from the ongoing accounting review."
Novatel Wireless, Inc. provides wireless broadband access solutions for the mobile communications market worldwide.
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