Subject: [NEXTEL-1] 16-Oct-03 Fulcrum Global Partners LLC On Nextel

From: [email-masked]
Date: Wed, 22 Oct 2003 12:42:03 -0400

16-Oct-03 Fulcrum Global Partners LLC (Walter Piecyk
NXTL: RAISING ESTIMATES & TARGET - BUY

Nextel Communications # (NXTL, $22.18, NASDAQ, BUY)
October 16, 2003

Company description: Nextel is a national wireless service provider that focuses
on the business segment through its unique walkie-talkie service. It uses iDEN
technology provided only by Motorola.

# Fulcrum Global Partners LLC makes a market in this security.
Decision points:

* We are increasing our estimates and price target based on the strong Q3 reported
by Nextel today.

* Nextel's Q3 results soundly beat all metric estimates as noted in the tables
below.

* We increased our fully taxed 2004 EPS estimate to $1.43 from $1.34 and 2005 to
$1.90 from $1.80.  We expect Nextel to print $2.12 in EPS next year based on an
alternative minimum tax rate of 8%.

* We increased our 2004 EBITDA to $5.0 billion from $4.8 billion and our 2005
EBITDA to $5.9 billion from $5.6 billion.  In 2004 we expect over 15% revenue
growth and over 20% EBITDA growth.

* We expect Nextel to generate $2.0 billion of free cash flow in 2004 and $3.0
billion in 2005.

* Our estimated 2003 year-end net debt position decreased to $8.7 billion from
$10.1 billion based on strong free cash flow outlook and the addition of $500
million of cash from a Direct Stock Purchase plan.  The ratio of year-end gross
debt to 2004 EBITDA is 2.3x and argues for upgrades to its current debt ratings,
which could enable further debt refinance activity by the company.

* We estimate Nextel will have $2.7 billion of cash on its balance sheet at the
end of this year after completing announced transactions and excluding the more
than $1 billion available under its bank facility. There are three remaining high
coupon issues that Nextel is likely to target with its ample cash position.
The $500 million remaining on the 9.95% 2008 notes, the $896 million remaining on
the 9.5% 2011 notes and the $1.6 billion remaining on the 9.375% 2009 notes.

We expect Nextel to start to look to stock repurchase, dividends and consolidation
of NII Holdings# (NIHD, $68.37, NASDAQ, BUY) or Nextel Partners# (NXTP, $9.12,
NASDAQ, Not Rated) as it completes its balance sheet clean up in 2004.  The
company has not commented on future cash use plans.

# Fulcrum Global Partners LLC makes a market in this security.

* We increased our 12-month price target to $35 from $33 based on
18.5x our new fully taxed 2005 EPS estimate, 24.4x our fully taxed 2004 EPS
estimate, 16.5x our estimate of reported 2004 EPS.  The target also implies 12.8x
our 2005 free cash flow estimate, 19.3x our 2004 free cash flow estimate and a TEV
to EBITDA multiple of 9.3x and 7.3x 2004 and 2005 estimates, respectively.

* Major risks include an industry-wide price war and a delay in its technology
upgrade.

Rating:                BUY            FY: Dec       2003 E   2004
E   2005 E
Price:                 $22.18         Mar           0.13 A
0.29     0.42
52-Week Range:         $22.23-$8.43   Jun           0.18 A
0.35     0.47
Market Cap:            $24.4 billion  Sep           0.28 A
0.40     0.51
2003 Net Debt:         $8.7 billion   Dec           0.27
0.40     0.50
Avg. Daily Volume:     17,990,000     FY            0.86
1.43     1.90
3-Yr. Est. Grwth Rate: 16.5%          Previous      0.77
1.34     1.80
Investment theme:      Growth         P/E           25.8x
15.5x    11.7x
Target price           $35.00         EBITDA $mm)   4,129
5,002    5,856
Risk level             High           Rev($mm)     10,789   12,648
13,985

Fully taxed EPS shown in table.  Market cap and net debt treat
convertible securities as debt.

16-Oct-03 Robert W. Baird and Co. (William Power) NXTL
Baird: NXTL: Strong Q3 Results; Raising Forecasts and Target
|
|
|Price (10/16/    22.31  Rating:      Outperform FY: Dec   2002A
2003E 2004E|
|03)                     Suitability: Higher         Q1   (0.20)A
0.21A      |
|52WK H-L:       22 - 9               Risk           Q2    0.06A
0.28A      |
|Market Cap      22,937  Price        25             Q3    0.14A
0.44A      |
|(mil)                   Target:                     Q4    0.21A
0.39E      |
|Share Out        999.9  Previous:    22           Total   0.27A
1.32E 1.73E|
|(mil):                                          Previous
1.09E 1.60E|
|Float (mil):     893.6                           FY P/E   82.6x
16.9x 12.9x|
|Avg. Daily Vol
18.07                                                      |
|
(mil):
|
|Dividend:
0.00                                                      |
|Yield:
0.00                                                      |
|
|

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