Piper Jarray Initiaties Coverage on LVLT - $1 Price Target - Neutral Rating
Piper Jaffray & Co. initiates coverage on Level 3 Communications with a Neutral. Price target $1.Piper analyst says, "Level 3 owns long distance and local fiber throughout the US – a valuable set of assets. However, the assets were amassed through considerable debt that needs to be refinanced. Additionally, integration of these assets has been challenging and still needs to be completed. We think upside is capped until the company can reduce installation times and restore customer confidence, and re-finance its balance sheet."
RF Take:
I normally have been skeptical of many analysts but admit this analyst is rather good. Piper makes valid points and by far this is a highly speculative position I own. The good news is that the bond offering of $220 million in senior notes went well, which shows that investors feel optomistics. The bad thing is that the firm can never seem to meet or exceed expectations. In addition, the firm is highly levered.
In conclusion, Piper sees the stock price of $1and the stock really doesn't seem to a technical play anymore, so they could be right. However, I think the stock is "fair" and could offer some upside if investors can get over the liquidity fears.
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