UPDATE: Macquarie Upgrades Frontier Communications (FTR) to Neutral
- Top 10 News for 12/2: Crude Rips on OPEC Cut; Starbucks' Schultz Steps Down; Nonfarm Payrolls Flat in Nov.
- Unemployment Rate Drops to 4.6%
- Bond yields slip on U.S. jobs data, euro steady before Italy vote
- Alibaba (BABA) Founder Jack Ma Discuss Plans to Retire; 'I Don't Want to Die at the Office'
- Starbucks Coffee (SBUX) CEO Howard Schultz to Step Down, Appointed Executive Chairman; Kevin Johnson New CEO
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
(Updated - September 6, 2016 8:15 AM EDT)
Macquarie upgraded Frontier Communications (NASDAQ: FTR) from Underperform to Neutral with a price target of $4.75 (unchanged). Analyst Amy Yong said fears around integration and wholesale access are "largely digested at this point."
"Stability is all that’s needed for the dividend yield to reverse back to its 3-year historical average of ~7.5% (Fig 1). At 9.25% yield and 5.7x/4.0x EBITDA and FCF, integration risks and potential changes to wholesale pricing are now sufficiently in shares," said Yong.
Discussing integration, the analyst said, "Post a bumpy integration quarter, a normal marketing rhythm should resume this fall. We expect improved customer net adds in 3Q/4Q which we are modelling at -86k/-85k, as snowbirds return to FL. Current promos include a US$400 Amazon gift card to switch as well as a one-year Amazon prime subscription with certain packages. Frontier is also pushing attractive bundles which offer up to a 25% discount to customers .... Based on industry checks, we expect the FCC to address or publish an order on Special Access as early as November. Though there is limited detail around business solutions including pricing, our sensitivity analysis suggests that every ~1% decline in data would equate to a ~0.4% decline in '17E EBITDA."
Shares of Frontier Communications closed at $4.56 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- JPMorgan Raises Rating on CBOE Holdings (CBOE) to 'Overweight'; Analyst Thinks Bats Technology Will Drive Greater Trading Activity
- Pivotal Research Downgrades Kroger (KR) to Hold
- ULTA Salon (ULTA) PT Raised to $290 at Stifel But Remains Sidelined
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Upgrades
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!