UPDATE 1-RESEARCH ALERT-Baird downgrades Syniverse to neutral
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June 25 (Reuters) - Robert W. Baird downgraded Syniverse Holdings Inc SVR.N, a provider of technology services to wireless telecommunications companies, saying the impact of the Verizon Wireless and Alltel Corp merger on the company could be greater than expected.
Baird, which cut its rating on Syniverse to "neutral" from "outperform," also cut its price target to $19 from $22 on the stock, which fell 12 percent in morning trade on the New York Stock Exchange.. Earlier this month, Verizon Wireless (VZ.N: Quotazione) said it would buy rural mobile service provider Alltel Corp for $28.1 billion, including debt.
"We believe Alltel currently represents at least a mid-single-digit percentage of Syniverse's revenue, with the majority generated by roaming," analyst William Power wrote in a note to clients.
In 2007, roaming accounted for about 10 percent of Alltel's total revenue, of which roughly half was from Verizon, that Syniverse stands to lose, the analyst said, and recommended that investors move to the sidelines.
Syniverse's contract with Verizon Wireless, its single largest customer, is currently up for renewal, which could pressure year-on-year results in 2008 and/or 2009, Power said.
Shares of the Tampa, Florida-based company fell $2.19 at $16.19 in morning trade on the New York Stock Exchange. (Reporting by Lalitha Murali in Bangalore; Editing by Deepak Kannan)
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