UPDATE: JP Morgan Downgrades Powerwave Technologies to Underweight
JP Morgan lowers its rating on Powerwave Technologies (NASDAQ: PWAV) to Underweight from Neutral as it sees earnings and cash flow generation lacking sustainability.
JP Morgan says, "We are downgrading our rating on Powerwave shares to Underweight from Neutral based on another gap down in run-rate revenues and what appears to be substitution to lower cost commodity RF products by OEMs and carrier customers. We believe the new goal for breakeven profitability at $70M in quarterly revenue looks overly optimistic and expect substantial negative earnings and cash burn in the coming quarters. We are dubious toward plans to foster meaningful new revenue streams from industries outside of telecommunication services especially amidst restructuring efforts and expense reductions."
PWAV closed at $1.57 a share yesterday.
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