Deutsche Bank downgraded Adtran (ADTN) to hold from buy.
Analyst George Notter says his chief concern is valuation. He notes the stock has run significantly higher since early October (up 138% vs. the Nasdaq's +13% since Oct. 1), and now trades at 28 times his $1.20 2003 earnings per share estimate. While he still thinks the company has meaningful upside in earnings per share power, he believes it is already reflected in the stock price. He notes his rating change is before an earnings per share call simply based on the perception that, at $36/share, the risk/reward profile on the stock is no longer attractive. He has a $38 target.