Stock Upgraded: TAC to neutral by Credit Suisse!

Credit Suisse has upgraded its rating on Total Access Communications (TAC) to "neutral" from "underperform" after the stock price fell below its 3.60 usd target. While we don't expect an immediate earnings impact from regulatory progress, an increase in 'option value' will likely balance further downside risks to earnings from the price war," Credit Suisse said in a note. "TAC remains a binary trade on regulatory change. In our view 'option value' begins to balance downside earnings risk at these share price levels," it said. The brokerage said it expects Thai regulators to make progress on interconnection, which is positive for the telco industry, within weeks. TAC's share price has underperformed the market by 13 pct with the heightened price competition among Thai telcos. Credit Suisse cut its 2006 EBITDA forecast for TAC by 14.9 pct to 16.8 bln baht citing pricing pressure and the company's likely response at least on the prepaid segment of its mobile business. "There could be further earnings downside if TAC is also forced to respond on post-paid pricing," it said. Credit Suisse expects TAC to post 4.66 bln baht in net profit this year from 4.61 bln a year ago. At 3.09 pm, TAC was up 0.02 usd or 0.57 pct at 3.52 on volume of 1.45 mln shares.