J.P. Morgan Lowers Price Target on Tellabs (TLAB)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on Tellabs TLAB; it has a $5.00 price target on the stock, down from $7.00. The JPM analysts noted that Tellabs just can't seem to catch a break. Its earnings report showed that already declining 5500 sales were exacerbated by an unexpected slow down in both 7100 and 8800 sales. The analysts believe that both AT&T and Verizon reduced Q4 spend on TLAB's products. They also believe that there are short term risks to revenue numbers. As for valuation, the analysts remarked, “TLAB shares are trading at $5.69 per share. Our Price target and 2011E EBITDA of $56.5m, put TLAB at a 2011 EV/EBITDA multiple of 12.6x, in-line with the sector average multiple.”