TheStreet: Lumen shares (LUMN) soared 33% on August 7, and they’re up nearly 300% from a year ago after the company said that it had secured $5 billion in new business thanks to the artificial intelligence explosion’s heavy demand for connectivity.
Large companies across industry sectors are seeking to secure fiber capacity quickly, Lumen said, “as this resource becomes increasingly valuable and potentially limited, due to booming AI needs.”
Let’s not forget that Lumen reported a second-quarter loss of 13 cents per share, down from earnings of 10 cents per share a year ago, and missing the Zacks consensus for a loss of 9 cents per share. Revenue totaled $3.27 billion, down 10.7% from a year ago and edging estimates of $3.26 billion. Free cash flow, money that is left over after a business pays its operating expenses, was negative $156 million compared with negative $896 million a year ago.
Lumen also earned a ranking of 99 out of 100 on Debtwire’s Likely to Distress (LTD) scoreboard, according to LightReading.
Several analysts adjusted their price targets after Lumen announced its results and business deals:
TD Cowen raised the firm’s price target on Lumen to $7 from $2.50 and kept a hold rating on the shares, according to The Fly. MoffettNathanson raised the firm’s price target on Lumen to $3 from $1 and kept a sell rating on the shares. Goldman Sachs upgraded Lumen to neutral from sell with a price target of $4, up from $1.
What would you bet on?
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