Lumen Technologies, the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Rollins from Citi maintained a Buy rating on the stock and has a $7.50 price target.
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Michael Rollins has given his Buy rating due to a combination of factors that suggest potential growth and improvement for Lumen Technologies. He sees several positive catalysts that could benefit Lumen’s stock, including the company’s strategic approach to expanding its market through physical, digital, and ecosystem layers. This approach is expected to enhance Lumen’s total addressable market and market share, particularly as demand for AI and connectivity grows.
Furthermore, Rollins notes that Lumen’s recent efforts in reducing interest expenses and better managing debt maturities have exceeded expectations, contributing positively to the company’s valuation. The reaffirmation of Lumen’s long-term financial goals, such as returning to revenue growth by 2028, is viewed as a promising sign of a multi-year turnaround. Additionally, potential catalysts like capturing additional sales, reducing costs, and improving financial flexibility are expected to support Lumen’s operational and financial restructuring efforts, with the market possibly underestimating Lumen’s ability to reduce net debt leverage significantly by 2026.
Rollins covers the Communication Services sector, focusing on stocks such as Lumen Technologies, Comcast, and Verizon. According to TipRanks, Rollins has an average return of 12.0% and a 64.78% success rate on recommended stocks.