UBS Warburg downgraded Juniper Networks (JNPR), Cisco Systems (CSCO), Nortel Networks (NT) Ciena (CIEN), Tellabs (TLAB), ADC Telecommunications (ADCT) and Avici Systems (AVCI) to hold from buy.
Analyst Nikos Theodosopoulos says his downgrades are based on a review of the further worsening of U.S. telecom capital expenditure trends for 2001. He thinks the group is stuck in a trading range for the next two quarters, perhaps longer. While he doesn't see a material downside in the group as most of the "bad news" already is factored into the stocks' prices, the poor telecom spending environment makes it hard to keep a buy rating.
Theodosopoulos says he will upgrade the group if he is convinced that 2002 will be better. He cut Cisco's $24 target to $20, Nortel's $20 target to $18, ADC's $12 target to $10, and Avici's $25 target to $15.
He kept the $60 target on Ciena, the $60 target on Juniper and the $45 target on Tellabs.