Markets & Finance

MSDW Cuts Powerwave to 'Outperform'


Morgan Stanley DW downgraded Powerwave Technologies (PWAV) to outperform from strong buy.

Analyst Arindam Basu says he is concerned about the timing of third-generation network rollouts due to the lack of the firm's participation in recent 3G auctions in Latin America and Europe. He says regulatory authorities are pushing out Asian auctions. Basu adds that OEMs are not providing him with any near-term solace. He believes that the company's key OEM partner, Nortel Networks, which drove 47% of Powerwave's revenue in 2000, is experiencing fluctuating demand in its wireless business for current and 3G systems. He cuts his $0.91 2001 EPS estimate to $0.81, and cut his $1.32 2002 EPS estimate to $1.15. Basu also cut his $65 price target to $40.


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