CIBC World Downgrades Nortel Networks
CIBC World downgraded its investment rating on shares of Nortel Networks (NT ) to sector perform from sector outperform.
Analyst Stephen Kamman says Nortel stock recently reached the $5 target he had set in April in upgrading the shares on a valuation basis. He had based his April upgrade on the opportunity created by a sell-off in Nortel following news that then-CEO Frank Dunn had been "terminated for cause" due to his "accountability for financial reporting". Kamman thinks this opportunity is now closed; at this point, he believes profitability and profit prospects remain unclear for Nortel. The analyst recommends that investors take a wait-and-see approach until mid-August, when Nortel will report full results for 2001-2004.