UBS Upgrades Level 3 Communications (LVLT) to Buy; Sell-Off Overdone

UBS upgraded Level 3 Communications (NYSE: LVLT) from Neutral to Buy with a price target of $57.00, saying the recent sell-off appears overdone as leverage continues to fall. The analyst sees the focus shifting from concerns to a new buyback program.

Analyst John Hodulik commented, "The stock has been hit hard this year, down 16% for 3 reasons: decelerating top line growth, Fx exposure and dislocation in the high yield markets. We believe this has created an opportunity with Level 3 shares given: 1) our belief that growth in North American Enterprise will stabilize in the mid-to-high single digit range, 2) Fx impact on revenue, EBITDA and FCF is limited and 3) declining leverage and a manageable maturity schedule insulate the company from short-term funding issues caused by capital market concerns. We believe now is the time to buy-in on the LVLT story as investor focus eventually shifts away from these concerns to the potential for a new multi-year buyback program, likely announced next year."

For an analyst ratings summary and ratings history on Level 3 Communications click here. For more ratings news on Level 3 Communications click here.

Shares of Level 3 Communications closed at $41.64 yesterday.

You May Also Be Interested In

• BofA Securities Upgrades Tesla (TSLA) to Buy on wind up of positive catalysts
• Mizuho Upgrades Airbnb Inc. (ABNB) to Buy, 'We see opportunities'
• JPMorgan Upgrades Beach Energy Ltd (BPT:AU) (BEPTF) to Overweight