Raymond James analyst Frank Louthan has maintained their neutral stance on LUMN stock, giving a Hold rating yesterday.
Frank Louthan has given his Hold rating due to a combination of factors surrounding the potential sale of Lumen Technologies’ consumer fiber operations. The recent reports of AT&T being in exclusive talks to acquire these assets at a valuation of over $5.5 billion have led to a negative market reaction, as previous expectations suggested a higher valuation range of $6-9 billion. This discrepancy in perceived value has contributed to the cautious stance.
Additionally, Louthan believes that the asset is likely to be sold within the next year, with AT&T or its joint venture partner Gigapower being strong contenders for the acquisition. The potential sale is seen as beneficial for Lumen, given its current slow pace of fiber build-out compared to its past projections. Despite the challenges, the asset remains attractive for larger carriers seeking to expand their fiber-to-the-home capabilities, making the Hold rating a balanced approach given the current uncertainties and opportunities.
In another report released yesterday, Wells Fargo also maintained a Hold rating on the stock with a $5.00 price target.