VoIP Will Drive Nortel's Growth Forbes Staff , 01.07.04, 2:29 PM ET
Tear Sheet / Chart / News
NEW YORK -
Merrill Lynch raised its rating on Nortel (nyse: NT - news - people ) to "buy" from "neutral" and initiated a 12-month price target of $6.30. Merrill noted that activity in voice over Internet protocol (VoIP) technology has increased substantially in the fourth quarter of 2003 and into 2004. It cited today's Verizon (nyse: VZ - news - people ) announcement that it will use Nortel as its VoIP supplier. The research firm said, "We believe Nortel's dominant share in this segment will become an increasing component of growth for the company." It also said Nortel's strong position in wireless "will yield share gains and translate into top line growth despite our modest expectation for the market as a whole." Merrill said the primary driver is the potential for better gross margins and further operating expense containment.
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