) to near-term neutral from accumulate.
Analyst Samuel Wilson says the risk-to-reward scenario is not favorable, as the stock has run up 161% from its lows of Sept. 21, 2001 and it now trades at 55 time his 2002 EPS estimate of $0.44. He expects flat business trends for the next one to three quarters, based on seasonality factors and the analyst's checks, which are indicating that the upgrade cycle for core routers will not begin until mid 2002, at the earliest. He notes that new orders for communications equipment have not shown an upturn and may fall further.
Wilson sees 2001 EPS of $0.54 and cuts his 2002 revenue estimate to $925 million, from $938.5 million, but retains his 2002 EPS estimate of $0.44. The analyst maintains his long-term buy rating on the stock.