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.