CenturyLink (CTL)
With a $16 billion market cap, CenturyLink is the largest of the stocks in this list. The Louisiana-based tech firm cloud and communication services, network solution, and online security services. CenturyLink does $23.4 billion worth of business annually, in North America, Latin America, and the Asia-Pacific region.
Despite inhabiting a rich niche in the tech industry, CTL reported decidedly mixed results in Q3. Revenues, at $5.6 billion, were down 3.6% year-over-year but still beat the forecast by a slim 1%. EPS benefited from higher lower interest expenses in the quarter, and the 28 cents reported was significantly better than the 25 cents reported in the year-ago quarter. Even so, EPS missed the forecast by 1 cent.
Mike McCormack, 5-star analyst with Guggenheim, is less than impressed with CTL. In fact, he has downgraded his rating on this stock to Sell, with a low $10 price target suggesting a downside of 33%. He points out that CenturyLink will suffer from wireline downsizing at AT&T and Verizon, and writes, “When we wrote our 3Q19 preview, we noted that despite a hope that the macro environment was improving, our checks were indicating that little in fact was changing and that pricing remained under severe pressure… we don’t expect to see any fundamental improvement.”
In overall stock performance, CTL is down 0.6% in 2019, while the 12-month asset growth has declined by 11.78%. Return on equity for the trailing 12 months is a stunning -43.34%. This is a company whose momentum is turning downwards, and quickly.
Similarly to CFR, the stock received 2 “buys,” 2 “holds,” and 2 “sells” in the past three months, giving it a consensus rating of Hold. The $13.60 average stock-price forecast indicates about 10% downside to the stock, declining from the current trading price of $15.06.
