RESEARCH TRIANGLE PARK — ‘Mike Z’ has already won a fan among analysts covering Nortel for all the changes he has made and others that apparently are on the way.

Mike Z is analyst Chris Umiastowski’s nickname for Mike Zafirovski, the former Motorola executive who is turning Nortel inside out and upside down as its new chief executive officer. Zafirovski took over in November, and the revolving door in the management suite hasn’t stopped turning. At a conference last week, Zafirovski pledged a further reorganization of the firm.

What Mike Z has said so far in public and what information the analyst has gleaned from other sources has Umiastowski confident that better days are ahead for Nortel.

“Every time we get a better idea of what Mike Z has planned for Nortel, we begin to feel more comfortable with the stock,” Umiastowski wrote in a research note for TD Newcrest, the equity division of TD Securities, on Thursday. “We suggest buying at the current price.”

Nortel stock (NYSE: NT) rose 11 cents on Thursday to close at $3.12. In reiterating his “buy” rating, Umiastowski stuck to a 12-month target price of $4 a share.

In his note, Umiastowski said Zafirovski has come up with a cost-cutting plan: “Here’s the beef – $650 million or more in potential savings — This information comes from information that the company has shared with investors recently, combined with our own analysis.”

The cuts include $400 million in supply management and procurement, an area where Zafirovski has made several hires, according to the analyst. He wrote another $250 million could be saved in financing. Another $200-400 million in research and development may be redirected, Umiastowski added.

Overall impact of the cuts will be “slightly positive” in Umiastowski’s opinion.

“We are tempted to say ‘neutral’ because none of this has actually happened yet,” he added, “but in our view Mike Z is a man of action and an expert in operational management. We think that having a good plan is half the battle.”

Not every analyst has been convinced that Nortel is headed for better performance. On Feb. 6, Citigroup cut Nortel to “hold” from “buy” and dropped the target stock price to $3.20 from $4.

Nortel: www.nortel.com