In a report released yesterday, Timothy Horan from Oppenheimer maintained a Buy rating on CenturyLink Inc (CTL), with a price target of $20. The company’s shares closed yesterday at $14.70, close to its 52-week low of $13.88.
Horan said:
“CenturyLink reported revenue of $5.78B, in line with our estimate, though on 37.9% margin for $2.2B of adj EBITDA, a miss. Operating FCF of $741M came in lower than our $954M estimate due to higher capex spend of $844M, which will ramp through 2019. CenturyLink slashed the dividend from $2.16 to $1.00, which will generate an incremental $1.24B in FCF in 2019. CTL will ramp capex (est $3.65B vs. $3.10B in 2018) and plans to delever to 3x from 4x within three years. Management have identified further business transformations that can save $900M per year. While the dividend cut will pressure the stock, CTL is now trading at over 20% FCF yield, which we see as stable and this should accrue to shareowners over time.”
According to TipRanks.com, Horan is a top 100 analyst with an average return of 14.9% and a 70.3% success rate. Horan covers the Technology sector, focusing on stocks such as Zayo Group Holdings, Limelight Networks, and GTT Communications.
The word on The Street in general, suggests a Hold analyst consensus rating for CenturyLink Inc with a $20.43 average price target, a 39.0% upside from current levels. In a report released yesterday, Merrill Lynch also maintained a Buy rating on the stock with a $29 price target.
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The company has a one-year high of $24.20 and a one-year low of $13.88. Currently, CenturyLink Inc has an average volume of 14.16M.
Based on the recent corporate insider activity of 57 insiders, corporate insider sentiment is negative on the stock.
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CenturyLink, Inc. is an investment holding company, which engages in the provision of integrated communications to residential and business customers. It operates through the Business and Consumer segment.