Following is information on wireless companies that had ratings changes and other news from investment banking and financial services firms this week.
- Moody’s Investors Service Inc. upgraded the long-term senior unsecured debt ratings of Sprint Corp. and Sprint Capital Corp. as well as the ratings of Nextel Communications Inc. to Baa2. The outlook for the ratings is stable.
- Piper Jaffray initiated coverage on Tekelec Inc. with an outperform rating and a $24 12-month price target. Piper Jaffray also started coverage on Sonus Networks Inc. with a market perform rating and a $5.50 12-month price target.
- Standard & Poor’s Ratings Service Inc. assigned a B rating to the debt portion of Qwest Communications International Inc.’s $2.5 billion universal shelf registration for debt, preferred stock and common stock. Proceeds are expected to be used for general corporate purposes, including refinancing of debt, capital investments and acquisitions.
- Standard & Poor’s Ratings Service revised its outlook on CenturyTel Inc. to negative from stable on concerns about the company’s accelerated rate of access-line losses, particularly from wireless substitution.
- CIBC World Markets raised its price target on Brightpoint Corp. from $24 to $28.
- Prudential Equity Group raised its price target on Alamosa Holdings to $17 from $16.
- Standard & Poor’s Ratings Services Inc. said its ratings an outlook on Deutsche Telekom AG are not affected by the announcement that DT’s Austrian mobile subsidiary, T-Mobile Austria, plans to acquire Tele.ring Telekom Service GmbH.
- Lehman Brothers raised its rating on Crown Castle International Corp. from equal weight to overweight and raised its 2006 price target to $27. The firm said it believes Crown’s strong organic free cash flow growth coupled with its ability to continually re-lever its balance sheet will allow it to drive attractive returns during the next five years. Lehman noted it believes Crown’s most likely use of cash going forward will be for stock buybacks.
- Fitch Ratings upgraded its ratings on American Tower Corp., including its issuer default rating from B+ to BB-, its unsecured debt from B+ to BB-, and its senior unsecured credit facility from BB+ to BBB-. The company’s senior subordinated debt remains BB+. Fitch also initiated a rating on SpectraSite Inc.’s secured credit facility at BBB-. The outlook is positive.
- Lehman Brothers reiterated its equal weight rating on Global Signal Inc. and established a 2006 price target of $42.
- UBS downgraded shares of ADC Telecommunications Corp. from buy to neutral on valuation. UBS maintained its $27 price target on the company.
- Avondale Partners downgraded shares of LCC International Inc. from market perform to market underperform, citing too much uncertainty. The company announced plans to restate results dating back to third-quarter 2004 and missed on earnings per share. The company is also undergoing top-level management changes and implementing a cost-restructuring plan. First Albany Capital cut the company’s rating from buy to neutral due to similar concerns.
- Pacific Growth Equities raised its rating on Sonus Networks Inc. from equal weight to overweight on a report of strong upside to June quarter expectations mainly based on revenue growth from wireless carriers. It raised its estimates on the company from revenues of $230 million and earnings per share of 11 cents for full-year 2006 to revenues of $247 million and EPS of 13 cents.
- Prudential Equity Group adjusted its price target on UbiquiTel Inc. to $10 from $9 following the company’s second-quarter results announcement.
- Raymond James increased its estimates on Global Signal Inc. while maintaining its market-perform rating on the company, based on an increased outlook for acquisitions this year.
- Standard & Poor’s said it has revised its outlook on the North American wireless tower sector and said it now has a more favorable view of the business characteristics of the industry. As part of its review, S&P upgraded the corporate credit ratings of SpectraSite Inc., American Tower Corp., AAT Communications Corp. and SBA Communications Corp.
- Fitch Ratings upgraded its ratings on Nextel Communications Inc.’s senior unsecured notes to BBB+ from BBB-. It also upgraded Sprint Corp.’s senior unsecured notes to BBB+ from BBB and Sprint Capital Corp.’s senior unsecured notes to BBB+ from BBB. Fitch said Nextel’s preferred stock rating has been withdrawn due to its conversion to shares of common stock. The rating outlook is stable.
- Merrill Lynch reinstated coverage of Nokia Corp. with a buy rating and a price target of $19.94.
- Standard & Poor’s Rating Service Inc. raised its ratings on Rogers Telecom Holdings Inc. to BB from B-, reflecting an equalization of the ratings with its parent, Rogers Communications Inc. The company also was removed from CreditWatch, where it was placed in May after it announced plans to acquire Call-Net.
- Avondale Partners downgraded Wireless Facilities Inc. to market perform from market outperform and lowered its price target on the company from $8 to $5 after the company announced second-quarter results. EPS was in line with expectations but revenues missed slightly. Avondale said this is the second quarter Wireless Facilities has missed revenue expectations. The firm lowered its EPS estimates for Wireless Facilities to 28 cents from 30 cents for 2005 and to 32 cents from 40 cents for 2006. First Albany Capital maintained its buy rating on Wireless Facilities and adjusted its forecasts to reflect new guidance from the company.
