UBS Financial downgrades telecom equipment maker Marconi Corp. (MRCIY ).
Analyst Robert Lea says he is downgrading to reduce from buy. He says Marconi's failure to win any business on BT's 21st Century Network (21CN) programme raises fundamental questions on its future.
He notes BT's effective snub to Marconi was a complete surprise, given the wide expectation that Marconi would win significant business on 21CN. He says while Marconi argues the decision was made on pricing grounds, he fears it could herald end of Marconi's ties with BT.
Lea says he's adopted a bearish valuation scenario in light of new risks. He cuts his 726-pence target to 230 pence.