If Nortel Executes…..

TD Securities analyst Chris Umiastowski has issued a research report after spending some time thinking about Nortel’s investor day a couple of weeks ago, and talking with a number of industry contacts. He clearly came away impressed with management.

“We figure that if Nortel executes smoothly, the stock will likely double. To us, that justifies spending a lot of time exploring the details behind the plan. Not wanting to be limited to talking to management, we interviewed many of our industry contacts and found that, while Nortel has many “plans and projects” underway, we were not yet able to find evidence of tangible results. Inside the report, we present several examples of our findings that leave us feeling it’s too soon to “drink the Kool-Aid”. We can’t yet draw conclusions except to say that this business transformation plan is key to Nortel’s stock price. As for us, we will have to keep digging to gather more evidence. ”

Umiastowski is maintaining his “hold” rating on Nortel with a 12-month stock price target (pre-consolidation) of US$2.50.


5 Responses to “If Nortel Executes…..”

  1. Ryan Says:

    That’s a big “IF” in that title. After a year at the helm, Zafirovski has undergoing a major change at Nortel. While this is all well and good and I applaud him, the fact that nothing tangible has yet been accomplished is worrisome. This troubling detail is further enhanced by the company losing market share and not joining in the trend of consolidation. When exactly does Chris from TD expect this stock price to double?? More importantly, how does he expect this to happen?? The prospect of a $60/share Nortel is wonderful, but highly unlikely unless it manages to make something tangible, and soon. It seems as though the company is scraping the bottom of the barrel by picking up projects in war-torn Iraq for low prices. Security alone will be a huge issue. But, what do I know, I’m just the little shareholder who’s seen his investment plummet each month while hearing the great prospects put forth by the management team who haven’t formed any tangible results. Here’s hoping Chris is right!!!

  2. Apple Says:

    Here’s hoping Chris is right!!!
    English is my second language but I understand what Chris said.
    He said there is nothing to be optimistic about NT stock, not now and not in the nearest future. Maybe later when Mike does something _anything to bring back trust_ profitability. Talking is cheap and we hear Nortel’s managers talk and talk and talk and the stock drops and drops to the 4 years lowest levels.
    We have the bull’s market , but what will happen to NT stock when the bear’s market comes?
    Will NT revisit all time lowest lows? Some analysts believe NT will be there again. /me too/

  3. Apple Says:

    He clearly came away impressed with management.
    who said so? Was it you Mark?
    because my research shows that Chris used to be impressed with Mike Z in Feb 2006 when Chris was expecting NT to reach $4 / $40 after the r.split/ and Buy rating
    Lots of new facts happened between Feb and Dec 2006 and Chris just maintains his Hold rating for NT with just $2.50 target /or $25 after the r.split numbers/
    What happened between Buy and Hold rating which Chris has now for NT?
    You tell me! (If you wish so)
    By revising his target from $40 to $25 Chris is admitting that he was wrong in Feb 2006 about NT stock!

  4. Anonymous Says:

    The “new management” is all smoke and mirrors…I was there and know.

  5. One time NT FAN Says:

    The “new management” at Nortel is all smoke and mirrors.

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