UBS Upgrades Level 3 Communications (LVLT) to Buy; Sell-Off Overdone
Get Alerts LVLT Hot Sheet
Rating Summary:
14 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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UBS upgraded Level 3 Communications (NYSE: LVLT) from Neutral to Buy with a price target of $57.00, saying the recent sell-off appears overdone as leverage continues to fall. The analyst sees the focus shifting from concerns to a new buyback program.
Analyst John Hodulik commented, "The stock has been hit hard this year, down 16% for 3 reasons: decelerating top line growth, Fx exposure and dislocation in the high yield markets. We believe this has created an opportunity with Level 3 shares given: 1) our belief that growth in North American Enterprise will stabilize in the mid-to-high single digit range, 2) Fx impact on revenue, EBITDA and FCF is limited and 3) declining leverage and a manageable maturity schedule insulate the company from short-term funding issues caused by capital market concerns. We believe now is the time to buy-in on the LVLT story as investor focus eventually shifts away from these concerns to the potential for a new multi-year buyback program, likely announced next year."
For an analyst ratings summary and ratings history on Level 3 Communications click here. For more ratings news on Level 3 Communications click here.
Shares of Level 3 Communications closed at $41.64 yesterday.
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