UBS Raises Price Target on Windstream (WIN) to $6.50
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UBS reiterated a Sell rating on Windstream (NASDAQ: WIN), and raised the price target to $6.50 (from $5.00), ahead of deal with ELNK. UBS estimates new WIN can generate ~$6.2B in revenues and $2.1B in EBITDA in 2017, falling LSD.
Analyst Batya Levi commented, "The agreed ELNK deal broadens WIN's network footprint, improves its cost structure and gives the combined entity added scale in the US business communications market amid a wave of industry consolidation. Assuming it goes ahead, we estimate the deal will lower leverage to 3.5x at YE17 from 3.8x at WIN standalone while lowering the dividend payout to ~40% from the current 75%. That said, we would expect revenue trends to remain challenged for the combined business."
Shares of Windstream closed at $7.23 yesterday.
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