CIBC World Markets transferred coverage of telecommunications equipment firm Lucent Technologies (LU) and upgraded its recommendation on Lucent stock to buy from hold.
Analyst Stephen Kamman says that Lucent appears somewhat undervalued, with near-term positive catalysts. While he does not minimize the significant operating and strategic challenges faced by the company, Kamman thinks Lucent represents a potential safe harbor, with limited downside risk and some upside potential in anticipation of the spin-out of its Agere unit.
The analyst is "extremely bullish" about long-term industry prospects due to a long-term shift to network-centric computing -- and a network-centric economy. He believes Internet-related growth will return as residential broadband penetration hits critical mass around the middle of 2002. Kamman has a $20 price target on the stock.