UPDATE: Oppenheimer Upgrades CenturyLink, Inc. (CTL) to Outperform
Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.
(Updated - November 8, 2016 9:41 AM EST)
Oppenheimer upgraded CenturyLink, Inc. (NYSE: CTL) from Perform to Outperform with a price target of $30. Analyst Timothy Horan thinks the stock's selloff is overdone.
"We are upgrading CTL to Outperform from Perform with a $30 PT as we believe the sell-off (-24%) in shares after the announcement of the proposed acquisition of LVLT as well as its 3Q earnings is more than overdone. Negative investor sentiment overlooks the positive aspects of combining the two companies, in our view," said Horan.
The analyst added, "Combining the two companies creates the second-largest business enterprise-focused company domestically (#3 globally). 75% of revenue will come from enterprise/wholesale. CTL's proforma dividend payout ratio (based on FCF) will be 2000 bps better at ~ 60%-70%. Importantly, after dividend payments, the company will generate ~ $1.5B in FCF/year, giving optionality to pay down debt or do more M&A (likely in EMEA) to help accelerate growth and shield future taxes."
Shares of CenturyLink, Inc. closed at $23.32 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Goldman Sachs Sees 27% Upside in MercadoLibre (MELI) and Raises Rating to 'Buy'
- MKM Partners Remains Bullish Ahead of Vail Resorts' (MTN) 1Q Report
- UPDATE: Oppenheimer Upgrades Envision Healthcare (EVHC) to Outperform
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Hot Comments, Hot Upgrades, Upgrades
Related EntitiesEarnings, Definitive Agreement
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!