Goldman Sachs analyst James Schneider upgraded Lumen (NYSE: LUMN) from Sell to Neutral with a price target of $4.00 (from $1.00).

The analyst comments: "We upgrade shares of Lumen to Neutral from Sell following new business announcements tied to Lumen winning new contracts to build and operate long-haul fiber connectivity between datacenters as well as other enterprise facilities. We believe this new business announcement (which includes Microsoft as a customer) reflects a meaningful growth opportunity for the company, albeit relatively small in the context of the company's overall operations (~2% estimated revenue contribution). Our prior view on the stock contemplated a significant decline in Lumen's legacy revenue stream with corresponding headwinds to EBITDA growth - and we continue to see meaningful risk of decline in these legacy businesses. However, we believe Lumen's latest business announcement provides the company with a well-defined, long-dated stream of cash flows that is accretive to the equity with a positive NPV (Net Present Value). As a result, we think the equity can sustain a higher multiple than we had previously contemplated. Stepping back, we believe management is doing the right things to stabilize and grow Lumen's business in the long run despite these near-term pressures."

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Shares of Lumen closed at $5.00 yesterday.