Nomura Securities Maintains a 'Neutral' on Alcatel-Lucent (ALU); Lowers Revenue and Gross Margin Estimates
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Price: $3.46 --0%
Rating Summary:
14 Buy, 6 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
14 Buy, 6 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Nomura Securities maintains a 'Neutral' on Alcatel-Lucent (NYSE: ALU) price target of EUR2.50.
Nomura analyst, Stuart Jeffrey, said, "Revenue and gross margin estimates cut on weakening industry outlook. Our checks and some early public statements by operators suggest that spending in H2 is at risk of further disappointment. H2 estimates may thus still come under further pressure. A very high correlation between revenues and gross margin drives some of our margin cuts. In addition, revenue mix effects also contribute as wireless and North American revenues likely see margin compression and account for a smaller share of revenue. The stock’s big swings in 2011 (up and down) result in a risk profile that requires significant upside potential for the stock to prove compelling. We see fair value at just EUR 2.2 on multiples and EUR 2.8 on a DCF. With risks to wireline spending appearing greater than for wireless we retain our preference for Ericsson (Nasdaq: ERIC) among the infrastructure names."
For more ratings news on Alcatel-Lucent click here and for the rating history of Alcatel-Lucent click here.
Shares of Alcatel-Lucent closed at $2.83 yesterday.
Nomura analyst, Stuart Jeffrey, said, "Revenue and gross margin estimates cut on weakening industry outlook. Our checks and some early public statements by operators suggest that spending in H2 is at risk of further disappointment. H2 estimates may thus still come under further pressure. A very high correlation between revenues and gross margin drives some of our margin cuts. In addition, revenue mix effects also contribute as wireless and North American revenues likely see margin compression and account for a smaller share of revenue. The stock’s big swings in 2011 (up and down) result in a risk profile that requires significant upside potential for the stock to prove compelling. We see fair value at just EUR 2.2 on multiples and EUR 2.8 on a DCF. With risks to wireline spending appearing greater than for wireless we retain our preference for Ericsson (Nasdaq: ERIC) among the infrastructure names."
For more ratings news on Alcatel-Lucent click here and for the rating history of Alcatel-Lucent click here.
Shares of Alcatel-Lucent closed at $2.83 yesterday.
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