Markets & Finance

CIBC World Downgrades Nortel Networks

CIBC World downgraded its investment rating on shares of Nortel Networks (NT) to sector perform from sector outperform.

Analyst Stephen Kamman says Nortel stock recently reached the $5 target he had set in April in upgrading the shares on a valuation basis. He had based his April upgrade on the opportunity created by a sell-off in Nortel following news that then-CEO Frank Dunn had been "terminated for cause" due to his "accountability for financial reporting". Kamman thinks this opportunity is now closed; at this point, he believes profitability and profit prospects remain unclear for Nortel. The analyst recommends that investors take a wait-and-see approach until mid-August, when Nortel will report full results for 2001-2004.

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