Salomon Smith Barney downgraded Metawave Communications (MTWV) to neutral from buy.
Analyst Thomas Robillard says the shortfall is due to U.S. economic weakness, U.S. operator capital-expenditure rationalization and Verizon's postponement of Q1 orders. Given the factors behind the miss, he doesn't believe the company's revenue impact is just a one-quarter event and thinks difficulties are likely to persist for the rest of the year.
In this market, he says even a compelling value cannot circumvent the macro environment. Thus, Robillard downgraded the shares and cut the price target to $4.