Deutsche Bank Starts Frontier Communications (FTR) at Hold; Fears of Dividend Cut to Weigh

Deutsche Bank initiates coverage on Frontier Communications (NASDAQ: FTR) with a Hold rating and $4 price target on fears of a dividend cut.

The firm comments, "In our view, FTR's dividend yield of 9.8% reflects NT pressure on revenue and EBITDA coupled with lingering questions about LT dividend sustainability. On
one hand, we do not see any immediate risk that FTR needs to cut its dividend because coverage through 2014 appears sufficient based on our FCF payout ratio estimates slightly under 50% in ’13 and ’14 thanks to improving revenue declines and well defined cost-cutting plans. On the other hand, we do expect the stock to flat-line based on persistent fears of a dividend cut while investors await the company's discussion of its FCF outlook for 2014 and beyond."

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 $4.08 yesterday.

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