Alcatel-Lucent SA rose 4 percent in Paris trading after analysts at Goldman Sachs raised the stock to ``conviction buy'' from ``neutral,'' saying concerns about the phone-equipment provider's sales outlook are overdone.
Ericsson AB fell in Stockholm trading after London-based analysts Tim Boddy, John Sawtell and Erik Malmberg advised investors sell the shares, from a previous ``neutral'' recommendation, saying the valuation doesn't reflect some risks.
Current market turmoil increases the chances of a longer recession in developed markets lasting through 2010, instead of a sharp recovery in 2009, resulting in earnings estimate downgrades, the analysts said in a note published today.
``In the current environment of high macroeconomic uncertainty and scarce liquidity we believe the market will remain highly focused on short-term considerations rather than fundamental value,'' Boddy, Sawtell and Malmberg said.
Paris-based Alcatel-Lucent is trading 30 percent below trough value, the Goldman Sachs analysts said. They also raised smartcard maker Gemalto NV to ``buy'' from ``neutral'' and maintained their recommendation for investors to buy shares of SES SA, the world's largest satellite operator.
Alcatel rose 11 cents to 2.81 euros in Paris. Gemalto gained 0.8 percent to 25.40 euros and SES added 3 percent to 14.99 euros.
``We see value in a number of `non-cyclical' stocks that have sold off along with the general market, especially Gemalto and SES,'' the analysts said.
Ericsson fell 5.3 percent to 60.60 kronor after Boddy, Sawtell and Malmberg predicted the company will ``significantly'' miss third-quarter earnings. The Swedish phone equipment provider's outlook for emerging markets is ``highly vulnerable'' to a downturn, and Ericsson may have to inject cash into its mobile-phone venture with Sony Corp., the analysts wrote.
TomTom NV, the Dutch maker of navigation products, fell 7.8 percent in Amsterdam trading after being added to Goldman Sachs's ``conviction sell'' list. The analysts predicted TomTom's management would cut the company's sales outlook.
Thomson SA, the world's largest maker of set-top boxes, declined 3.6 percent to 2.42 euros after being named a conviction sell. The analysts said a prolonged consumer recession will cut into 2009 sales as pay-TV operators add fewer subscribers.
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