Boston, MA 10/15/2013 (wallstreetpr) – Alcatel Lucent SA (ADR) (NYSE:ALU) recorded a 3.26% surge in its share prices after Barclay has revised its outlook on the stock from ‘equal weight’ to ‘overweight’. This upward revision came after the speculative news ofa possible merger between Alcatel and Nokia developed in the market. According to Barclay, the merger story between Nokia and Alcatel-Lucent could be convincing,as together they can pose a tough competition for Ericsson and Chinese growing Huawei Technologies.
As per the unconfirmed reports, Nokia is believed to plan tie-up with Alcatel after its deal fetching $7.28 of revenue with the Microsoft is over. However,Alacatel which is still struggling to keep its business profitable can become a huge restructuring threat to Nokia in case the tie-up takes final shape. It’s been a known fact that Alcatel has been loosing its cash every year post its merger with Lucent Technologies in the year 2006.
Recently, Alcatel has declared its aggressive restructuring plan to cut its costs by 15 percent i.e. 1.4 billion, which involves 10,000 job cuts across the countries in which it operates along with narrowing down the focus to profitable products. Alcatel’s proposed revamping plans are facing the heat from the French government, who have pushed the company for reviewing its job cut plan in France.
At the same time, Reuters has reported that China’s largest telecom network infrastructure provider Huawei, has denied the possibility of taking over Alcatel and quoted its inability to integrate as the reason for its decision.
While, Alcatel might have received positive revision from Barclays but it still maintains ‘hold’ or lesser ratings by six out of nine analysts. Alcatel’s further up-gradation or price band hikes could come if it continues to move upward for the upcoming days. Currently, the market’s combined consensus has set a price target for Alcatel at $3.03, down $0.77 from its current price of $3.80.
