Goldman Sachs Very Bullish On Alcatel-Lucent (ALU) and LM Ericsson (ERIC), Says Capex Cycle Bottoming

Shares of Alcatel-Lucent (NYSE: ALU) and LM Ericsson Telephone Company (Nasdaq: ERIC) are trading slightly higher today following a positive note from analysts at Goldman Sachs. The firm upgraded Alcatel-Lucent to Buy, with a EUR4.4 price target, and added LM Ericsson to its Conviction Buy List, with a Skr97 price target.

The firm said weak third quarter results from the equipment vendors marks the bottom in the global capex cycle. The firm's economists' forecast of 4.1% 2010 global GDP growth supports their view that revenue trends at operators are stabilizing and improving, which will allow for a recovery in capital investments.

The firm's price targets represent upside of 46% for Alcatel-Lucent and 40% for LM Ericsson.

Shares of ALU are up 1.8% today and ERIC is up 2%.

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