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Technology Stocks : Newbridge Networks

NN 12.24

-2.9%

Nov 13 3:59 PM EST

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To: zbyslaw owczarczyk who wrote (17305)	2/18/2000 11:25:00 PM
From: jeff greene	Read Replies (1) of 18016

ZO -- Isn't MorganStanley Dean Witter the investment banker hired by NN in November? Here's a few excerpts from Morgan's 2/4/00 profile on Alcatel: Valuation We rate ALA Strong Buy, with a target price of €350 for ordinary shares and $70 for ADR shares. Our target price is based on our target 2001 P/E of 40 times, a 15% points discount to the current 2001P/E for the sector. We believe that given the continued recovery in management credibility and focus on high growth area, this valuation gap should narrow. Our sum-of-the-parts model suggests Alcatel?s transmission and ADSL businesses alone could be worth more than the current market capitalization of the whole group. ....ú Acquisition of Packet Engines appears strategically sound. With Packet Engines, Alcatel has acquired Gigabit Ethernet technology ? which strengthens Alcatel?s position at the core of the enterprise data network and the edge of the public network ? as well as Internet Protocol expertise that should enable Alcatel to enhance and broaden its existing product portfolio. Key Investment Risks ú Narrow-band switch business is still very soft. The market has been reminded of the less attractive parts of Alcatel ? the narrow-band business. As yet, we see no sign that it will pick up longer term (although the second half should be seasonally stronger). For 2000, we continue to believe there won?t be any growth in switching. This could prove conservative. Jeff

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