Thursday, Credit Suisse upgraded Adtran Inc. (ADTN) shares to Neutral from Underperform and increased its price target to $20 from $15.
Analyst Silverstein upgraded the stock to Neutral and increased his 12-month target price to $20 from $15 based upon applying 14x to his revised $1.42 calendar 2010 EPS estimate (incl. ESO). Driving the analyst's upgrade and increased price target is the looming release by the U.S. federal government in Jan 2010 of the $7.2 billion of "broadband stimulus" funds.
With the OMB having indicated that spending is to commence in Jan 2010, the analyst has significantly increased his calendar 2010 revenue and EPS estimates. While the exact scope and timing of the impact is still far from clear, the analyst believes that the prospective impact is sufficient to provide a floor under ADTN's shares.
The analyst believes ADTN's calendar 2009 HDSL revenues will prove disappointing. The analyst forecasts calendar 2009 HDSL revenues will decline by over (10%) year-over-year v. ADTN's single digit decline forecast.
In the wake of the (11.5%) year-over-year decline in HDSL revenues in first half of 2009, in order for ADTN to deliver only a (5%) year-over-year HDSL revenue decline, which the analyst believes is the expectation of most investors, ADTN would have to generate at least 1% HDSL year-over-year revenue growth in second half of 2009 v. his current (11.4%) forecast. The analyst believes that both historical trends and the outlook for enterprise T1 demand support our more conservative outlook.
Currently, ADTN is up $1.16 or 5.31% and trading at $22.99.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.