DA Davidson Upgrades CenturyLink, Inc. (CTL) to Neutral, High Dividend Yield Offers Comfort
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Price: $11.00 --0%
Rating Summary:
5 Buy, 14 Hold, 10 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
5 Buy, 14 Hold, 10 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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DA Davidson upgraded shares of CenturyLink, Inc. (NYSE: CTL) to a Neutral rating from its previous rating of Underperform. The firm is maintaining its price target of $36.
The company's adjusted Q2 earnings was $0.44, well below its guidance range of $0.63-$0.67. The firm notes that the miss was due to higher depreciation on Qwest customer lists which impacted earnings by $0.20 per share.
Comcast (Nasdaq: CMCSA) remains to be a major competitor of Qwest as it shares roughly 60 percent of Qwest's total territory. CMCSA recently released a new promotion add to gain customer share. The new promotion offers customers their service for only $19.95 for 6 months.
CTL reiterated its synergy guidance of $575 million, but stated that Qwest cut a majority of its excess costs before the closing.
An analyst at DA Davidson comments, "We think the 8.7 percent dividend yield offsets any near-term integration risk. If the Savvis integration goes smoothly then CTL should be able to improve its revenue growth compared to our expectations and there could be more upside in the stock."
The firm is reducing its FY11 and FY12 EPS estimates from $2.66 and $2.36 to $1.68 and $1.36.
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 $33.25 yesterday.
The company's adjusted Q2 earnings was $0.44, well below its guidance range of $0.63-$0.67. The firm notes that the miss was due to higher depreciation on Qwest customer lists which impacted earnings by $0.20 per share.
Comcast (Nasdaq: CMCSA) remains to be a major competitor of Qwest as it shares roughly 60 percent of Qwest's total territory. CMCSA recently released a new promotion add to gain customer share. The new promotion offers customers their service for only $19.95 for 6 months.
CTL reiterated its synergy guidance of $575 million, but stated that Qwest cut a majority of its excess costs before the closing.
An analyst at DA Davidson comments, "We think the 8.7 percent dividend yield offsets any near-term integration risk. If the Savvis integration goes smoothly then CTL should be able to improve its revenue growth compared to our expectations and there could be more upside in the stock."
The firm is reducing its FY11 and FY12 EPS estimates from $2.66 and $2.36 to $1.68 and $1.36.
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 $33.25 yesterday.
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