September 10, 1999 5:31 PM
Better Times Ahead for Lucent, Nortel
By Monica Rivituso
COMMUNICATIONS NETWORKING companies Lucent Technologies (LU) and
Nortel Networks (NT) sizzled today after a couple of analysts made positive
comments about each. Lucent, the No. 1 maker of telephone equipment, reportedly
got its pop from Schroder & Co.'s Stephen Koffler, who initiated coverage with an
Outperform rating and a 12-month price target of $75. Meanwhile, Nortel shares
jumped more than 4% a day after Sutro & Co. analyst Patrick Houghton reiterated his
Buy rating. "Nortel is a stock that I've been pushing since last year," he says.
Houghton likes the looks of Nortel's optical networking business, especially given the
company's recent $133.1 million contract from Argentine data transmission company,
Impsat. "This contract adds to an impressive year-to-date list of six Nortel awards in
the Caribbean and Latin America," said Houghton in a note. He continues to believe
that the company is the worldwide market-share leader in optical networking,
especially in high-performance, broadband networks. "[Nortel] is very well positioned
in the optical networking space," he says.
While Lucent and Nortel often vie for No. 1 status, and both are strong companies,
Houghton prefers Nortel, as it trades at a 40% to 50% discount to Lucent's multiple.
He has a $55 12-month price target on Nortel shares. |
