Deutsche Bank Downgrades Alcatel

Alcatel is suffering at the hands of NYSE with Deutsche Bank downgrading Alcatel to hold from buy as the shares approach what the bank calls a fair value at EUR11. The bank says Alcatel is "well positioned for Triple Play, but risks remain." The risks, say Deutsche Bank, include fierce competition, delays, and regulatory risks that could push back network upgrades, as happened with Telstra.

At the same time CM-CIC Securities has also downgraded Alcatel to hold from accumulate, saying it prefers handset makers like Nokia to equipment makers. CM-CIC notes that Alcatel's current price is higher than EUR11 fair value.

CM-CIC commented, "We think that speculation about a possible link-up with Thales, bearing in mind that Alcatel CEO Serge Tchuruk has only four months to find a solution before changing posts within the company, could continue weighing on Alcatel shares, effectively handicapping them in the race against Nokia in the coming months."