Nortel Networks downgraded to "neutral weight"

08/07/06 - Prudential Financial

NEWYORK, August 7 (newratings.com) - Analyst Inder M Singh of Prudential Financial downgrades Nortel Networks (NT) from "overweight" to "neutral weight," while reducing his estimates for the company. The target price has been reduced from $4.00 to $2.50.

In a research note published on August 4, the analyst mentions that the company’s restructuring plan has not been executed well, which has made the profitability targets unattainable in the near future. Nortel Networks is expected to witness challenges in attaining its targeted market share of more than 20% in key markets due to industry consolidation, the analyst adds. The EPS estimates for 2006 and 2007 have been reduced from $0.07 to $0.01 and from $0.22 to $0.08, respectively.