J.P. Morgan makes announcement
NEW YORK--(BUSINESS WIRE)--Feb. 27, 1997--Networking sector to show
strong growth, J.P. Morgan technology analyst says Issues "buy" ratings
on Cisco, Cascade, Cabletron, Newbridge
"The market for networking equipment offers one of the sustainably
strongest, non-cyclical growth opportunities available to investors
today," says William Rabin, J.P. Morgan's technology analyst for the
data networking and technology services sectors, in a new research
report. He is reiterating "buy" ratings on Cisco Systems, Cascade
Communications, Cabletron Systems, and Newbridge Networks; and a "market
performer" rating on 3Com.
Rabin is calling for 30% annual growth in the networking-equipment
market through the end of the century, rising from $28 billion
industrywide in 1996 to $72 billion in 2000.
Networking - which includes equipment such as switchers and routers that
form the foundation of the Internet and corporate networks of all sizes
- is an immature business compared to computing and telephony, but Rabin
points to "a fundamental restructuring" among key players. He expects a
consolidation wave, fueled by corporate clients' desire to buy more of
their networking equipment from a single supplier, to spur market
leaders to acquire small startups and become stronger competitors. Rabin
says the changes will be such that only Cisco, the dominant player, is
likely to survive in its current state.
Rabin notes several factors driving the growth in networking, at both
the corporate and consumer levels: the inexorable growth of the
Internet, which doubles in size each year and is not expected to slow;
the deployment of communications-based or client/server business
applications; the increasing popularity of telecommuting; and the launch
of new technologies - Gigabit Ethernet, IP Switching, and RSVP.
Rabin's stock recommendation are as follows:
- Cisco Systems (CSCO) with a "buy" rating and a 12-month price target
of $85;
- Cascade Communications (CSCC) with a "buy" rating and a 12-month price
target of $85;
- Cabletron Systems (CS) with a "buy" rating and a 12-month price target
of $50;
- Newbridge Networks (NN) with a "buy" rating and a 12-month price
target of $42; and
- 3Com (COMS) with a "market performer" rating and a near-term price
target of $42.
For information on obtaining a copy of the report, contact Chris
Molanphy at (212) 648-8213.
CONTACT: William D. Rabin, 212-648-8894
Christopher M. Molanphy, 212-648-8213
www.jpmorgan.com |
