The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Carriers
Standard & Poor’s Rating Services placed its ratings on UbiquiTel Inc. on CreditWatch with positive implications. The move is based on steady improvements in the company’s wireless business, including continued subscriber growth, increased roaming and wholesale revenues, and improved operating efficiencies.
Standard & Poor’s Ratings Services assigned a CCC rating to regional wireless carrier Rural Cellular Corp.’s proposed $175 million senior subordinated floating rate notes due 2012. “The ratings reflect the company’s vulnerable business position as a regional wireless provider with only 716,755 subscribers (representing an 11 percent penetration of 6.4 million population covered equivalents), competing against both the national wireless carriers as well as other entrenched regional cellular carriers, such as Alltel and US Cellular, coupled with its highly leveraged financial profile,” said Standard & Poor’s credit analyst Catherine Cosentino.
Merrill Lynch upgraded Verizon Communications from neutral to buy. RBC Capital Markets lowered its price target on Verizon to $40 from $43 and reduced its 2005, 2006 and 2007 EPS estimates on the carrier. Robert W. Baird lowered its price target on Verizon from $38 to $35 but raised 2005 and 2005 revenue forecasts.
Robert W. Baird raised its estimates on Sprint Nextel Corp. after the carrier reported solid third-quarter results and raised guidance. Baird maintained its outperform rating and $31 price target.
Other
Robert W. Baird initiated coverage on Pctel with a neutral rating and a $9 price target.
Piper Jaffray upgraded Navteq Corp. from market perform to outperform based on a dramatic recent pull-back in price and its belief that the fourth quarter will reflect a typically seasonally strong quarter for the company.
Merrill Lynch reduced Qualcomm Inc.’s rating from buy to neutral on concerns about possible negative sentiment related to its patent dispute with several other vendors.
CIBC World Markets raised its price target on Brightpoint from $22 to $24 and raised its fourth-quarter and 2006 revenue and earnings estimates after the company pre-announced positive third-quarter financial results. CIBC said Brightpoint is benefiting from strong overall handset sales and that new handset introductions should encourage further growth at the company.
First Albany Capital upgraded Symmetricom Inc. to buy from neutral, saying the company’s potential to beat estimates is high based on the firm’s belief that expectations are low. Symmetricom reported fiscal first-quarter 2006 results last week.
Avondale partners reiterated its market perform rating on Sierra Wireless and increased its 2006 estimates on the company due to the outlook for EV-DO and HSDPA PC cards and embedded modems in laptops. Piper Jaffray also raised its estimates on Sierra. RBC Capital markets raised its price target on Sierra to $12 from $10 and reiterated its sector perform rating on the company.
Piper Jaffray lowered its estimates on Andrew Corp. based on weaker-than-expected guidance and continued disappointing near-term operating margin outlook. Andrew reported solid quarterly results, however Piper Jaffray said the company’s margin structure continues to disappoint with pro forma operating margins of 4.8 percent. Piper Jaffray maintained its $11 price target on the company.
Robert W. Baird raised estimates on Syniverse Holdings Inc. after the company reported solid third-quarter results and revenue guidance above previous estimates. Baird also raised its price target on the company from $18 to $20 and reiterated its outperform rating.
Robert W. Baird lowered its price target on Tekelec to $22 from $25 on lower estimated earnings per share. Baird said Tekelec exceeded its expectations during the third quarter.
