Goldman Sachs Removes Level 3 Communications (LVLT) from Conviction Buy List
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Goldman Sachs downgraded Level 3 Communications (NYSE: LVLT) from Conviction Buy to Buy with a price target of $55.00 (from $64.00). Analyst Brett Feldman noted softer revenue outlook.
"While we lower out 12m target price by 14% to $55 on a mix of a lower target multiple and growth expectations, we maintain our Buy with 19% potential upside. Further, we expect LVLT to provide an update on capital allocation plans by year end. While it has stated M&A is a higher priority, we believe the recent pullback in the stock price increases the relative appeal for buybacks and could see an authorization announced by year end. Highlighting its financial flexibility, we estimate LVLT could in theory repurchase +60% of its stock over 5 years at target leverage," said Feldman.
Shares of Level 3 Communications closed at $45.23 yesterday.
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