Jefferies Remains Sidelined on EarthLink Holdings (ELNK) Ahead of WIN Merger

Jefferies maintained a Hold rating on EarthLink Holdings (NASDAQ: ELNK), and cut the price target to $4.90 (from $6.50), ahead of WIN merger. In conjunction with earnings, Earthlink announced a definitive merger agreement to be acquired for $1.1bn by Windstream in an all-stock deal.

Analyst Scott Goldman commented, "Continuing on the wave of telco M&A, the acquisition of Earthlink appears to be another deal for scale and synergies. While the company has proven adept at cost cutting in efforts to turn around the business, organic revenue declines continue at a high single digit pace. Accordingly, the merger makes strategic sense as any organic turnaround faces steep challenges. We lower our price target to $4.90 based on our $6 WIN target and maintain a Hold rating."

For an analyst ratings summary and ratings history on Earthlink click here. For more ratings news on Earthlink click here.

Shares of Earthlink closed at $5.60 yesterday.

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