Alcatel-Lucent "hold"

07/03/07 - Deutsche Bank

LONDON, July 3 (newratings.com) - Analyst Gareth Jenkins of Deutsche Bank maintains her "hold" rating on Alcatel-Lucent (ALU-EUR). The target price is set to €11.50.

In a research note published this morning, the analyst mentions that the company is expected to report its 2Q EPS at €0.08. Alcatel-Lucent’s EBIT and net income figures may vary significantly from expectations, resulting in short-term volatility in the company’s share price, the analyst says. Alcatel-Lucent is likely to benefit from a transition towards wireline capex in developed markets and robust order intake in submarine is expected to lend support to the company’s margins in 2H, Deutsche Bank adds. The company’s ongoing headcount reduction is expected to boost profitability into next year, according to the analyst.