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Ahead of the Bell: JPMorgan upgrades Nortel

By Associated Press
June 12, 2008 | Comments (0)

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A JPMorgan analyst on Thursday upgraded Nortel Networks Corp. to "Overweight" from "Neutral", saying the Canadian telecommunications equipment company will benefit from a stronger operating margin and better product sales in the second half of the year.

Shares rose 35 cents, or 3.8 percent, to $9.55 in premarket electronic trading Thursday.

Ehud Gelblum said he expects the company to reach an operating margin of 10 percent over the next one to two years due to lower expenses and the company's partnership with Alvarion Ltd. announced Wednesday.

Nortel said the deal would help deliver long-range wireless access to customers. The terms were not disclosed.

Furthermore, Gelblum said, the company's Metro Ethernet division will see better profitability as sales of a new networking product climbs during the second half of the year.

Gelblum noted that JPMorgan has rated Nortel at "Neutral" for the past four years.

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