Powerwave Shares Suffer After Word of Downgrade

Shares of Powerwave Technologies Inc. fell Thursday after at least two analysts cut their ratings on the Irvine maker of wireless equipment.

The stock slumped to a 52-week low of $24.88 during the trading session before rallying to close at $26.63, down $2.44, or 8.4%, in Nasdaq trading. Nearly 6.9 million shares changed hands, almost triple the average daily volume over the last three months.

Morgan Stanley Dean Witter analyst Arindam Basu on Thursday downgraded the stock to outperform from buy, lowering his price target for the issue to $40 from $65.

The downgrade followed a similar move by Earl Lum of CIBC World Markets, who cut his rating on the shares Wednesday to buy from strong buy and reduced his price target to $34 a share from $67.

Powerwave’s shares had traded as high as $75.38 on Dec. 11 but have taken a beating since the company in January cut its sales forecasts for the year.

Lum, in a research note, cited a “potential pause” in wireless industry spending in the first half of 2001 as well as the company’s continued exposure to Lucent Technologies Corp. and Nortel Networks, which are looking to reduce inventories of fiber-optic components.

Another analyst reiterated his bullish rating, however. Dan Rauscher Wessels’ Jim Moeller retained a strong buy-aggressive rating, as well as a $68 price target for the shares.