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DA Davidson Starts Lumos Networks Corp (LMOS) at Underperform

February 10, 2012 1:42 PM EST
LMOS Hot Sheet
Rating Summary:
    2 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 7 | New: 23
DA Davidson initiates coverage on shares of Lumos Networks Corp (Nasdaq: LMOS) with an Underperform rating and $11 price target.

The firm highlights the acquisition of Verizon’s (NYSE: VZ) properties, allowed the company to become the main provider of incumbent telecom services in West Virginia.

An analyst at DA Davidson comments, "We think LMOS’ fiber network could be worth 6x-8x EBITDA, but, with ~$60 million of run-rate EBITDA, this would result in a value of $360-$480 million—which is below the current enterprise value of $527 million for all of Lumos."

For Q4, the firm forecasts EPS of $0.09 on $50.9 million in sales.


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