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Wall Street has generally had a harsh view of Lucent Technologies Inc. The company’s stock is trading near its 52-week low of $2.49 per share, and most analysts rate it as a neutral or hold.

However, some see Lucent as a shining light among the industry’s gear merchants. “We believe Lucent remains the most significantly undervalued asset in our universe,” wrote Steven Levy of

Lehman Brothers in a recent research note to investors. The firm makes a market in Lucent’s securities. “It seems to us that Lucent’s shares have been trading as if the company were headed

back towards the brink of bankruptcy, which, in our view, is not even close to reality.” Indeed, investors appear especially brusque with Lucent’s stock. Although most of the

telecommunications market has seen similar declines-Lucent’s stock is down from its high of around $80 per share in 2000-the company’s stock is still hovering around a few dollars per share,

Ericsson’s is trading at almost $30 per share, and Motorola Inc. and Nokia Corp. too are enjoying relatively buoyant prices. Only Nortel Networks Ltd. is suffering a similar treatment,

likely due to the company’s accounting woes. Most analysts appear to agree with Wall Street’s sentiments toward Lucent. “Our channel checks suggest Lucent’s wireline sales have been softer

than expected in 2Q and … we believe CDMA net adds slowdown at China Unicom (5 percent of total Lucent sales) will continue to negatively impact Mobility sales,” wrote Nikos Theodosopoulos

with UBS. The firm also makes a market in Lucent’s securities and has conducted investment-banking services for the company. “Hence, we (are) revising down 2Q sales estimates.” The

disagreement over Lucent’s prospects center on its potential sales in the wireless market, as well as its position in the wireline segment. First, Lehman Brothers argues that the recent

spate of carrier consolidation could benefit Lucent-a position contrary to that of most industry observers. Lehman Brothers points out that Lucent recently scored a W-CDMA contract with the

new Cingular Wireless L.L.C., and it also has deep relationships with both Sprint Corp. and Verizon Wireless. Indeed, Sprint accounted for 11 percent of Lucent’s business in the fourth

quarter, according to Lehman Brothers, while Verizon Communications Inc. accounted for fully 27 percent. “The potential effects on capital spending should be examined on a vendor-by-vendor

basis,” the firm wrote. “Investors should not assume that the transactions will negatively impact each vendor in the same way.” UBS acknowledged Lucent’s prospects with wireless carriers

like Cingular, but said the company’s wireline sales are continuing to decline. Specifically, Lucent’s voice networking, ATM switching and optical product revenues are declining, as are its

PHS system sales in China. Further, UBS predicted that Lucent will reduce its workforce in the coming months to shave expenses. Despite basing their opinions on the same data, UBS and Lehman

Brothers differ significantly on their evaluations of Lucent. Lehman Brothers expects the company’s stock to outperform; the firm set its target price for the company at $6.50 per share.

UBS, on the other hand, rates Lucent’s stock as neutral. The firm’s target price is $2.60. In the first quarter, Lucent reported revenues of $2.34 billion, down 3 percent from the previous

quarter but up 3 percent from the $2.26 billion it reported in the same quarter a year prior. Lucent reported a net income of $174 million, down from the $1.21 billion it scored in the

previous quarter and the $349 million it reported in the year-ago quarter. For its second quarter, analysts polled by Thomson First Call predict Lucent will report earnings per share of 4

cents and revenues of $2.31 billion. Lucent is scheduled to announce its second-quarter results Tuesday.