A recent run in shares of Mitel (Mitel Stock Quote, Chart, News: TSX:MNW, Nasdaq:MITL) has National Bank Financial analyst Richard Tse altering his rating on the stock. In a research update to clients today, Tse maintained his one-year price target of (U.S.) $11.00 on Mitel, but lowered his rating on the stock from "Outperform" to "Sector Outperform". His target implied a return of 11 per cent at the time of publication. The analyst explained his reasoning. "With MITL having moved up +17% year-to-date, the risk-to-reward profile is looking more balanced in our view from earlier this year," Tse says. "As investors following our research will know, Mitel\u2019s recent Investor Day had the Company pivoting once again \u2013 this time towards organic growth (with Cloud). No doubt, that shift has helped draw some profile to comparables like RingCentral (RNG) and 8x8 (EGHT), which also have had strong year-to-date moves of 37% and 31%, respectively. Yet, while Mitel\u2019s most recent strategic pivot has the Company moving to mine a large installed base (of 70 mln), we believe that success will require a higher degree of execution that will take time to play out given the magnitude of the changes in its go-to-market strategy." Tse thinks Mitel will generate EBITDA of (U.S.) $208.4-million on revenue of $1.319-billion in fiscal 2018. He expects those numbers will improve to EBITDA of $236.6-million on a topline of $1.324-billion the following year. The analyst cautions that he has not soured on the company. "In our view, the move in the stock price year to date has priced in a reasonable level of execution already when 2018 is expected to be a transitional year for the Company. Our downgrade is not a negative call on the potential execution of that transition; we just believe the recent price appreciation has priced in a meaningful portion of that potential success, thereby balancing the risk-to-reward. We think the next move in the stock would come from scaling free cash flow in 2019; that said, we\u2019ll need to see considerable execution for that next leg."