Nomura Securities Maintains a 'Buy' on Frontier Communications (FTR); 2013 Guidance Should Ease Storm
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Price: $0.26 --0%
Rating Summary:
6 Buy, 11 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 11 | New: 17
Rating Summary:
6 Buy, 11 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 11 | New: 17
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Nomura Securities maintains a 'Buy' on Frontier Communications (NASDAQ: FTR) price target of $5.00.
Analyst, Mike McCormack, said, "Frontier filed an 8K with clarifying statements
regarding 1Q12 other revenue and working capital influences, as well as 2013 capex and opex savings guidance. Most importantly, Frontier guided 2013 capex to a range of $625mn -$675mn, which compares to our $725mn estimate, and consensus of $783mn."
"As a result of the lower capex expectations, we now anticipate a 51% dividend payout ratio in both 2012 and 2013, which is well below peer Windstream’s ~70% payout ratio, and Centurylink’s ~80%. On a fully taxed basis, Frontier’s dividend payout ratio is ~60% of 2013 FCF, compared to ~90% at Windstream. With lower capex giving an improving level of safety regarding the dividend, we view the ~150bps dividend yield discount ascribed to FTR shares relative to Windstream (NYSE: WIN) as unwarranted."
For an analyst ratings summary and ratings history on Frontier Communications click here. For more ratings news on Frontier Communications click here.
Shares of Frontier Communications closed at $3.26 yesterday.
Analyst, Mike McCormack, said, "Frontier filed an 8K with clarifying statements
regarding 1Q12 other revenue and working capital influences, as well as 2013 capex and opex savings guidance. Most importantly, Frontier guided 2013 capex to a range of $625mn -$675mn, which compares to our $725mn estimate, and consensus of $783mn."
"As a result of the lower capex expectations, we now anticipate a 51% dividend payout ratio in both 2012 and 2013, which is well below peer Windstream’s ~70% payout ratio, and Centurylink’s ~80%. On a fully taxed basis, Frontier’s dividend payout ratio is ~60% of 2013 FCF, compared to ~90% at Windstream. With lower capex giving an improving level of safety regarding the dividend, we view the ~150bps dividend yield discount ascribed to FTR shares relative to Windstream (NYSE: WIN) as unwarranted."
For an analyst ratings summary and ratings history on Frontier Communications click here. For more ratings news on Frontier Communications click here.
Shares of Frontier Communications closed at $3.26 yesterday.
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