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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: JeffT who wrote (18918)	2/8/2002 3:47:54 PM
From: David Hansen	Read Replies (1) \| Respond to of 21876

Lucent Technologies Upgrade (LU:NYSE) Strong Buy 1 Lucent Technologies, (www.lucent.com) headquartered in Murray Hill, New Jersey, is a leading global designer, developer and manufacturer oftelecommunications systems, software and equipment. Lucent: Dispelling Doubt; Upgrading to Strong Buy : ♦ We are upgrading Lucent from a Market Perform to a Strong Buy based on our belief that Lucent’s restructuring efforts are taking hold. ♦ We believe Lucent has taken measurable steps improving its balance sheet over the past five quarters, specifically with regard to accounts receivable, inventory and short-term debt. These balance sheet improvements set the stage for earnings improvement. ♦ Lucent has significantly reduced off-balance sheet risk related to vendor financing. We believe the current unreserved balance of drawn commitments of $469 million is a manageable level of exposure. ♦ We believe Lucent’s new products will drive revenue going forward. A review of deployed SONET and digital cross connect (DCS)equipment suggests Lucent is well-positioned to capture a portion of the contacts for next-generation equipment from the RBOCs. ♦ We believe the current valuation of Lucent is attractive. Adjusting for its 57.8% ownership in Agere (AGR.A/$4.60/Market Perform), Lucent is trading at one times our calendar 2002 revenue estimate, at the low end of its historical range and well below comparable vendors. ♦ While the overall telecom market remains murky, we believe Lucent is showing tangible signs of a turnaround. We believe the current valuation offers investors an attractive risk/reward profile and would urge investors to build a position. EQUITY QUITY RESEARCH ESEARCH February 5, 2002 Telecommunications Equipment Company Comment Chris Fischer (727) 575-5981 cfischer@ecm.rjf.com Todd Koffman (727) 575-5647 tkoffman@ecm.rjf.com Kevin DiQuattro, Res. Assoc. Current Price (2/04/02) $6.15 Projected 12-Month Price Range $16.00-4.20 52-Week Range $18.40-$5.00 Dividend/Yield $0.00/0.0% Tangible Book Value (12/01) $2.71 Suitability Aggressive Growth Shares Out. (mil.) 3416.0 Market Cap. (mil.) $21,008.4 Avg. Daily Vol. (10 day) 19,202,740 Proj. 3-Yr EPS Growth Rate NM ROE (TTM) NM LT Debt (mil.)/% Cap. $3274/15% P/E Ratios 2002E NM 2003E NM