Alvarion Ltd. (ALVRQ)

[midastouch017]

Analysts positive on Alvarion-Nortel deal
Alvarion rose 6.8% on Nasdaq yesterday and another 1.6% in early trading today.
Shiri Habib-Valdhorn 12 Jun 08 18:19
Oppenheimer & Co. and Oscar Gruss & Co. have published upbeat reports on WiMAX equipment maker Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) following the company's announcement of a strategic cooperation agreement with Nortel Networks Inc. (NYSE; TSX: NT) yesterday. Both investment houses reiterated their "Buy" recommendations. Oscar Gruss also reiterated its $12 price target; Oppenheimer set no target. Alvarion rose 6.8% on Nasdaq yesterday and another 1.6% in early trading today to $8.15.
Oscar Gruss analyst Ehud Eisenstein says, "The agreement will provide Alvarion access to Nortel's wide customer base and dominant market position. Additionally, Alvarion should increase its footprint to areas where it has had less focus, mainly the US and Canada. In our view, although the relations are still in a relatively early stage, the business opportunity for Alvarion is significant. A major marketing agreement was always the missing element in Alvarion’s story given the expected change in the competitive landscape and the magnitude of the opportunities looking forward."

Oppenheimer analysts Ittai Kidron and George Iwanyc say, "We view Nortel's decision to stop WiMAX development to work with Alvarion as a meaningful endorsement of Alvarion's capabilities. The agreement brings Alvarion a strong and global sales channel, improved scale that can drive both top and bottom line, and is a good sign that Alvarion will be a survivor and a leader in a market ripe for consolidation."

They warn however that the deal raises questions. "For someone like Nortel who was expected to be a major player in mobile WiMAX to abandon development raises questions about the overall market opportunity. Simply put, this could be viewed as a signal that Nortel doesn't expect the WiMAX market to develop as it once thought and that its efforts are better spent on LTE development."

Published by Globes [online], Israel business news - www.globes-online.com - on June 12, 2008

http://globes-online.com/serveen/globes/docview.asp?did=1000...