Nortel took another beating today after an analyst downgraded the company from an Outperform to a Neutral and changed the target share price from three dollars to two. The analyst from Robert Baird stated that the reason for the most recent downgrade was due to a lack of new contracts and the most probable delay in their 2008 earnings guidance by another year.
I think that's bogus. Just less than a month ago, another analyst from Jeffries & Co. upgraded the company from a Hold to Buy stating that new contracts and the continued cleaning up and restructuring of the company was a good sign to stock performance. Also think about the new CEO Zafirovski and how he's been able to manage fix up the company a step at a time. Nortel has a strong foothold in the industry and possibly the best telecommunications technology in the world. What keeps its prices down are the companies financial ugliness, the previous accounting scandels and, well its debt. Get that all out of the way, and you have dirt cheap stocks.