It's been a tough year for traditional wireline stocks: CenturyLink (CTL) has fallen 28% year to date, Windstream (WIN) is down 71.9%, and Frontier Communications (FTR) is down 83.4%.
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Barclays' Amir Rozwadowski takes a look at the stocks today, writing that ongoing declines in legacy services, along with weaker-than-expected growth in strategic initiatives, have combined to pressure the industry. Moreover, the stocks face continued competition from higher-capacity network operators, are burdened with debt-laden capital structures, and could see technology disruption--and none of these headwinds are probably going away any time soon.
Therefore, he initiated coverage on both Frontier and Windstream with relative Underweight ratings. He upgraded CentruyLink to Equal Weight, as he sees less potential downside.
More from the note:
CenturyLink is up 3% in recent trading, while Frontier is down 3.1% and Windstream is off 4.6%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
