) to sector outperform from sector perform.
Analyst Steve Kamman says his upgrade reflects improved a risk/reward proposition for 2005/2006. He now sees a balance of risks tilted toward the upside.
He sees significant profit leverage, with potential gross margin improvements from the "10 Gig copper rollout," and a recent price increase. He also sees potential operational expense cuts from further acquisition cost synergies, and expects three unprofitable units to return to at least breakeven.
Kamman maintains 74 cents 2005 earnings per share and 96 cents 2006 estimates, but sees a potential for upside. He sets a $22 target.