In a report released yesterday, Matthew Griffiths from Bank of America Securities reiterated a Sell rating on Uniti Group (UNIT – Research Report), with a price target of $3.50.
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Matthew Griffiths has given his Sell rating due to a combination of factors impacting Uniti Group’s financial performance and outlook. The company reported mixed first-quarter results, with revenue falling short of expectations, although adjusted EBITDA was in line and AFFO exceeded projections. Despite these mixed results, the company lowered its guidance for net income attributable to common shareholders and funds from operations (FFO), signaling potential financial challenges ahead.
Additionally, the ongoing merger with Windstream is still pending approval from two state Public Utility Commissions, adding uncertainty to the company’s future. The anticipated revenue decline from legacy services, despite growth in consumer fiber broadband, further complicates the outlook. Griffiths reiterates a price objective of $3.50, based on a 5.5x 2025 EV/EBITDA, and maintains an Underperform rating due to high leverage and the uncertain financial landscape as the merger progresses.
UNIT’s price has also changed moderately for the past six months – from $5.930 to $4.570, which is a -22.93% drop .