IPR 0.00% 4.1¢ ipernica limited

nortel .....

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    February 25th, 2008

    RBC analyst Mark Sue took a baby step last month by cutting his target price to $16 from $18.

    Now, he’s taking a major step by slashing his target price to $10 ($1 taking into account the 1:10 stock consolidation) from $16, while maintaining his "sector perform" rating.

    Sue said the decision was based on the fact demand outlook traditional telecom equipment is deteriorating, Nortel’s competitive positioning has worsened, and its balance sheet is weak. "In our view, the demand outlook is weakening for traditional telecom equipment," Mr. Sue said in a recent research note to clients. "And considering Nortel’s compromised competitive positioning and its challenged balanced sheet, we believe that there may be more downside risk to the shares."

    He expects Nortel quarter-over-quarter revenue in the first-quarter to decline by 25% to $2.4-billion.

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