undervalued?, page-4

ubs - cdr upgraded to buy -----------------------------------------------
Commander Upgraded To Buy
November 22 2005

UBS has upgraded its rating on Commander Communications (CDR) to Buy 2 from Neutral 2 following recent weakness in the company's share price.

The broker notes the stock has fallen 12% since the start of September, putting it on an EV/EBITDA multiple of 7.7x.
This compares to the non-manufacturing small cap average, which has risen to 12x from 11.7x over the same period.
While Telstra (TLS) has announced its intention to build a fibre-to-the-node network and restrict the access of competitors, the broker suggests such restrictions are unlikely to receive regulatory approval.
Taking a worst-case scenario the broker has only factored small ULL benefits into Commander's earnings profile, so if Telstra was successful there would be limited downside to its estimates.
The broker's target price is unchanged at $2.40, while its valuation remains $2.30.
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