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To: James Strauss who wrote (8866)	6/5/2001 1:09:45 PM
From: James Strauss	Read Replies (2) \| Respond to of 13094

Light At the End Of The Tunnel For Lucent? **************************************************** For those who are long term oriented, LU is looking like a company that could rise from the ashes... Here is a recent analyst upgrade... Caveat: I own it... I also own AGRA... Analysts Upgrade Lucent on Failed Alcatel Merger Talks By Emily Burg LUCENT TECHOLOGIES (LU): On the heels of the news that merger talks between Lucent and Alcatel (ALA) had ended, analysts at Lazard Freres & Co. upgraded the shares of the beleaguered telecom-equipment maker to Buy from Outperform on May 30. The analysts write they are encouraged that Lucent ended merger talks with Alcatel because they would rather see Lucent management implement further cost-cutting measures than go through a merger. Overall, the analysts believe Lucent's business-risk profile is improving. Demand for its products and services will likely stabilize over the next several quarters. Plus, if Lucent sticks to its cost-cutting plan, it should be profitable by the second half of 2002, or possibly sooner. The long-planned sale of its fiber-optics business should give the company the liquidity it needs to continue to execute its turnaround plan. "Based on recent checks, we believe Lucent is on track to achieve sequential revenue growth and gross-margin improvement in the June quarter, driven by improving business trends in optical, wireless and circuit switch," the analysts write. They raised their 12-month price target on Lucent's battered shares to $14 from $12, based on 1.6 times the analysts' fiscal year 2002 revenue estimate of $24 billion and on Lucent's 58% stake in Agere (AGRa), which they value at about $2.50 per share. The shares closed at $7.88 on May 31. thetelecommanalyst.com Jim