) shares fell after Bear Stearns downgrades to peer perform from outperform.
Analyst Phil Cusick says that with M&A activity again in the news, the shares overall could appreciate from current level. But in a consolidating environment, he believes the strategy of owning targets is more viable, and sees Nextel as more of a buyer.
Cusick says the biggest driver of the company's valuation been strong free cash flow expected in 2004. With expanding capital spending across the industry and the possibility of Nextel getting involved in an acquisition, he believes investors may start questioning the viability of that cash flow stream. He sees $2.12 in 2004 EPS.