UBS Warburg downgraded Juniper Networks (JNPR ), Cisco Systems (CSCO ), Nortel Networks (NT ) Ciena (CIEN ), Tellabs (TLAB ), ADC Telecommunications (ADCT ) and Avici Systems (AVCI ) to hold from buy.
Analyst Nikos Theodosopoulos says his downgrades are based on a review of the further worsening of U.S. telecom capital expenditure trends for 2001. He thinks the group is stuck in a trading range for the next two quarters, perhaps longer. While he doesn't see a material downside in the group as most of the "bad news" already is factored into the stocks' prices, the poor telecom spending environment makes it hard to keep a buy rating.
Theodosopoulos says he will upgrade the group if he is convinced that 2002 will be better. He cut Cisco's $24 target to $20, Nortel's $20 target to $18, ADC's $12 target to $10, and Avici's $25 target to $15.
He kept the $60 target on Ciena, the $60 target on Juniper and the $45 target on Tellabs.