NEW YORK -(Dow Jones)- J.P. Morgan analyst Ehud Gelblum initiated coverage Tuesday of the telecom and data networking sectors - and it should come as no surprise that Cisco Systems Inc. (NasdaqNM:CSCO - News) warranted his highest rating.
Gelblum and his team started coverage on six companies, rating as neutral digital cross-connect maker Tellabs Inc. (NasdaqNM:TLAB - News) , telecom equipment titan Nortel Networks Corp. and data router maker Juniper Networks . Meanwhile, he started optical systems maker Ciena Corp. (NasdaqNM:CIEN - News) and telecommunications gear giant Lucent Technologies Inc. (NYSE:LU - News) at neutral.
"From a more macro perspective, we are increasingly negative on the sector as a whole and do not expect to see many true value investment opportunities until demand at the end-user side of the food chain turns back up again," Gelblum wrote. "We believe the near-term personality of the sector is one that is less of a technology game and more of a nuts-and-bolts business, even somewhat cyclical in nature. Longer term, we expect the traditional technology growth spurt dynamics of the industry to return, but not for approximately three to four years."