Needham & Company Downgrades ADTRAN (ADTN) to Hold; Solid 4Q11 Results Relative to Expectations But Numerous Potential Headwinds Remain
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Price: $8.40 +4.09%
Rating Summary:
12 Buy, 13 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
12 Buy, 13 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company downgraded ADTRAN (NASDAQ: ADTN) from Buy to Hold.
Needham analyst says, "While ADTRAN has performed relatively well in a challenging cap-ex environment, we believe the shares could face several headwinds over the near to medium term and are therefore taking advantage of the relief/short covering rally yesterday (up 8% on the day and ~22% since recent post-NSN lows) to move to the sidelines, and as such are downgrading the shares. Potential headwinds include: 1) GM trajectory looks likely to continue to erode as the company ramps service and increases its penetration in the more price competitive Tier 2/Tier 3 market; 2) Planned acquisition of NSN business will have immediate negative impact on GM and could prove more difficult to integrate than expected given history of prior cross-cultural deals; 3) 2Q12 could mark the 3rd Q in row with mid-single-digit revenue growth, making case for NT multiple expansion challenging; 4) competition is likely to increase within Centurylink’s Qwest (NYSE: CTL) properties in 2H12 as Calix (CALX, NR) gets certified."
For an analyst ratings summary and ratings history on ADTRAN click here. For more ratings news on ADTRAN click here.
Shares of ADTRAN closed at $33.98 yesterday.
Needham analyst says, "While ADTRAN has performed relatively well in a challenging cap-ex environment, we believe the shares could face several headwinds over the near to medium term and are therefore taking advantage of the relief/short covering rally yesterday (up 8% on the day and ~22% since recent post-NSN lows) to move to the sidelines, and as such are downgrading the shares. Potential headwinds include: 1) GM trajectory looks likely to continue to erode as the company ramps service and increases its penetration in the more price competitive Tier 2/Tier 3 market; 2) Planned acquisition of NSN business will have immediate negative impact on GM and could prove more difficult to integrate than expected given history of prior cross-cultural deals; 3) 2Q12 could mark the 3rd Q in row with mid-single-digit revenue growth, making case for NT multiple expansion challenging; 4) competition is likely to increase within Centurylink’s Qwest (NYSE: CTL) properties in 2H12 as Calix (CALX, NR) gets certified."
For an analyst ratings summary and ratings history on ADTRAN click here. For more ratings news on ADTRAN click here.
Shares of ADTRAN closed at $33.98 yesterday.
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