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Technology Stocks : Alcatel-Lucent (ALU)

ALU 3.460

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Mar 3 4:00 PM EST

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From: Sam	11/8/2011 9:33:30 AM
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Alcatel-Lucent Slides As Citi Cuts Rating To Sell From Buy Alcatel-Lucent shares, which tumbled last week after the telecom equipment company provided disappointing financial guidance, has extended the skid after Citigroup analyst Zahid Hussein this morning reversed his stance on the stock to Sell from Buy. His new target is $1.38, down from $5.79. The stock closed Friday at $2.30. “While we still believe ALU has a competitive advantage in LTE, we believe the lack of visibility going into [Q4 2011 and the first half of 2012] , incremental cash restructuring and poor working capital management will lead to further financial disappointment,” he writes in a research note. “We expect the market to remain skeptical on ALU’s long-term prospects given consistent cash burn and lack of non-core assets to sell. We believe management needs to consistently execute ahead of expectations to change the market’s perception – something ALU has so far not managed to do.” The analyst adds that he expects “more intense pricing pressure in 2012,” with vendors that have great financial resources likely to be more aggressive and offer financing and flexible payment terms to win business. ALU is down 21 cents, or 9.1%, to $2.09. forbes.com

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