UPDATE: Bank of America Merrill Lynch Reiterates Buy Rating, Lowers PT on Mitel Networks

In a report published Monday, Bank of America Merrill Lynch reiterated its Buy rating on Mitel Networks Corporation

, but slightly lowered its price target from $5.00 to $4.00. BofA Merrill Lynch noted, “We are transferring coverage of Mitel, a provider of IP telephony products, and maintain our Buy. The stock is down 37% since its recent preannouncement, as investors remain focused on the balance sheet risks with debt, ~2x its market cap, due within the next 2-3 years. However, we view this as an attractive opportunity for investors willing to hold the stock through the current volatility. Our positive stance is based on three factors: solid fundamental position in its target small medium enterprise (SME) market, restructuring efforts that could yield margin expansion, and continued cash flow generation at a level of 2.5x the interest expense that mitigates liquidity issues and helps reduce its debt burden. Our $4 PO is based on an undemanding 0.7x 2013 EV/Sales target multiple.” Mitel Networks Corporation closed on Friday at $2.74.