Clearwire Gets No Love From Merrill Or Morgan Stanley

Clearwire (CLWRD) this morning was the subject of a pair of fairly grim research notes, one each from Morgan Stanley and Merrill Lynch . Morgan Stanley’s Simon Flannery resumed coverage of the stock with an Underweight rating; they had suspended coverage while Morgan was advising the company on its recently completed deal to buy Sprint ’s (S) Xohm business. “We are bullish on the prospects for wireless data growth, and we are pleased to see Clearwire complete its transaction with Sprint and receive its capital injection,” he writes. “Nevertheless, we believe the build plan appears likely to be slowed down, reflecting in part the tough financing markets.” He adds that with positive free cash flow some years away, risk reward is “unattractive.” Merrill Lynch analyst Michael Funk cut his rating on the stock today to Neutral from Buy, cutting his price target to $5.50 from $20. Ouch. While he sees an opportunity to build a valuable ... (link)