Analyst Gregory Williams of TD Cowen maintained a Hold rating on Lumen Technologies, retaining the price target of $8.00.
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Gregory Williams has given his Hold rating due to a combination of factors, including balanced positive and negative signals in Lumen’s latest update. Although revenue met expectations, EBITDA lagged, and the company’s new 2026 outlook targets only modest EBITDA growth while leaning heavily on tax, capex, and working-capital tailwinds to lift free cash flow. Management highlighted $2.5 billion in fresh pre-connect fiber wins, expanding the pipeline to $13 billion and reinforcing longer-term momentum, yet those projects require several years to convert into revenue and do little to offset near-term softness. Debt reduction after the AT&T fiber transaction and associated interest savings improve the balance sheet, but EBITDA still missed consensus, underscoring operational challenges. The mix shift toward higher-growth digital segments and anticipated business-revenue improvement of 75 bps by 2026 provide some reassurance, yet the digital ramp remains uncertain ahead of the February 2025 investor day.
In Gregory Williams’s view, stronger free cash flow guidance based on financial levers and the growing PCF pipeline offer enough support to avoid downgrading the stock, but the lack of immediate earnings acceleration and the multiyear lag before PCF contributions materialize limit upside conviction. Consequently, a Hold rating acknowledges steady progress toward the 2028 revenue inflection while remaining cautious about execution risk and the timeline for translating strategic wins into tangible earnings improvements.
Williams covers the Communication Services sector, focusing on stocks such as Echostar, Charter Communications, and Lumen Technologies. According to TipRanks, Williams has an average return of 3.7% and a 39.89% success rate on recommended stocks.
In another report released today, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $9.50 price target.