Following are wireless company and industry ratings changes made by financial services and investment banking firms this week.
- In a telecom services report, Merrill Lynch said it expects Verizon Wireless will gain share during the second quarter, while Cingular’s growth will remain solid but slower. The remaining three national carriers will track steadily in what is traditionally a strong quarter for the industry, said Merrill Lynch. The firm raised its net addition estimates for Verizon from 1.5 million to 1.6 million and lowered its estimates for Cingular from 1.3 million to 1.2 million.
- Lehman Bros. raised its price target on Crown Castle International to $18 from $17 and reiterated its equal rate rating on the company. Lehman said it is increasingly upbeat about the outlook for wireless growth this year and next year and believes Crown is well positioned to benefit from that growth.
- Avondale Partners reiterated its market outperform rating on Novatel Wireless Inc. following news of a supply agreement for EV-DO PC cards with Sprint Corp. Avondale said the announcement is positive for Novatel as it makes the company a key supplier to Sprint, Verizon Wireless and Vodafone Group plc, in addition to other carriers.
- RW Baird maintained its neutral rating on Flextronics International Ltd. following news the company has agreed to sell its Network Services business to Telavie and its semiconductor business to AMIS Holdings. The combined deals are expected to provide Flextronics with $550 million in cash.
- RW Baird reiterated its outperform rating on Nextel Partners Inc. on strong operating momentum and the expectation that the company could meet or beat second-quarter and full-year forecasts.
- Prudential Equity Group maintained its overweight rating on Ericsson following a GSM/GPRS expansion contract the vendor won with Bharti Tele-Ventures Ltd. in India.
- UBS upgraded Tellabs from neutral to buy based on an improved outlook in data networking and increased confidence that management can reduce R&D from 20 percent of current sales to 15 percent of sales in 2006.
- RW Baird maintained its outperform rating on Nortel Networks following the departure of the company’s chief operating officer and chief technology officer after only three months with the company. Nortel’s hiring of COO Gary Daichendt and CTO Gary Kunis was part of the reason Baird upgraded the company earlier this month. Baird said the resignations could cause Nortel’s stock to trend lower and could signal difficulties the company may have recruiting outside executive talent in the future.
- Prudential reiterated its overweight rating on Advanced Micro Devices.
