UPDATE: Morgan Stanley Upgrades Frontier Communications (FYBR) to Equalweight
- S&P 500 ends down as jobs data rekindles rate hike fear
- U.S. Adds 528,000 Jobs in July, Topping Estimates
- Berkshire Hathaway (BRK-A) (BRK-B) Posts Strong Operating Results Even As Buyback, Equity Buying Slows
- Amazon (AMZN) to Buy iRobot (IRBT) for $1.7 Billion
- Block (SQ) Stock Falls Despite Earnings Beat, Analysts Remain Positive
Morgan Stanley analyst Simon Flannery upgraded Frontier Communications (NASDAQ: FYBR) from Underweight to Equalweight with a price target of $25.00 (from $24.00).
The analyst comments "The primary drivers for our underweight thesis for frontier were 1) valuation representing a substantial premium to peers 2) an estimated $3B in funding needed for the fiber build and 3) execution risks from a fiber build perspective. On the first point the stock is down ~17% YTD trading at a 6.5x EBITDA multiple (using 2023 numbers) which we view as more appropriate in the context of how we think about valuation for wireline and cable companies. On the funding point, we do still see needs for capital down the line but the recent $1.2B debt raise does plug some of this gap giving the company runway until mid-2024. Lastly, from a fiber build perspective the company has shown strong results with broadband adds ahead of our expectations for two quarters now as build costs continue to be in-line with management's expectations so far. With the valuation reset, near-term funding needs addressed and the fiber build going according to plan so far we see less risks in this situation and move to Equal-weight. The stock is currently trading approximately in-line with our new Price Target; the Bull/Bear skew is wide here but also relatively balanced."
Shares of Frontier Communications closed at $24.64 yesterday.
You May Also Be Interested In
- Western Digital (WDC) Outlook 'Uglier Than Expected'
- Carvana Co. (CVNA) Shares Jump Despite Missing Analyst Estimates
- Nine Entertainment Co Holdings Ltd. (NEC:AU) PT Lowered to AUD3.40 at Credit Suisse
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Upgrades
Related EntitiesMorgan Stanley
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!