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Gabelli Upgrades CenturyLink, Inc. (CTL) to Buy; Valuation Call

August 4, 2011 9:34 AM EDT
Get Alerts CTL Hot Sheet
Price: $11.00 --0%

Rating Summary:
    5 Buy, 14 Hold, 10 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Gabelli upgraded CenturyLink, Inc. (NYSE: CTL) from Hold to Buy with a price target of $41.00.

Gabelli analyst says, "While the legacy wireline business (ex-Savvis) is doing a little worse than previously expected (based on the current guidance), we believe current valuation is compelling and represents an attractive entry point for longer-term investors. CTL’s management tends to be somewhat conservative in providing guidance, but has a proven track record of successfully integrating acquisitions and realizing meaningful synergies. Following Wednesday’s sell-off (-$2.27/-6.15%), valuation is attractive at 5.5x 2012P EBITDA. Our 2012 PMV estimate is $41 per share (based on the following TEV/EBITDA multiples: 6x on legacy-CTL/Embarq, 5x on Qwest, and 11x on Savvis). The company pays $2.90 dividend (8.4% current return), which appears sustainable over the next five years."

For more ratings news on CenturyLink, Inc. click here and for the rating history of CenturyLink, Inc. click here.

Shares of CenturyLink, Inc. closed at $34.66 yesterday.


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