Bank of America Securities analyst Matthew Griffiths reiterated a Sell rating on Uniti Group yesterday and set a price target of $7.50.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Matthew Griffiths has given his Sell rating due to a combination of factors affecting Uniti Group’s financial performance and strategic positioning. Despite the completion of the Windstream merger, which aligns Uniti with key telecom trends like FTTH deployments and increased demand for Hyperscaler connectivity, the company’s high leverage is a significant concern. This financial burden could limit Uniti’s ability to invest in growth opportunities, potentially hindering its competitive edge.
Additionally, Uniti’s second-quarter results were mixed, with revenue and adjusted EBITDA falling short of both Griffiths’s and the Street’s estimates. Although the company has ambitious plans to expand its fiber network and capitalize on AI-related demand, the updated guidance post-merger indicates potential challenges. The pro forma net debt stands at $8.3 billion, leading to a leverage ratio of approximately 5.5x, which may pose risks to future financial stability. These factors contribute to Griffiths’s cautious outlook and the reiteration of an Underperform rating.
UNIT’s price has also changed moderately for the past six months – from $5.469 to $7.160, which is a 30.92% increase.