Lumen Technologies stock price has been showing a declining tendency so we believe that similar market segments were not very popular in the given period. (Louisiana) stock forecastĪs of 2023 March 04, Saturday current price of LUMN stock is 3.170$ and our data indicates that the asset price has been in a downtrend for the past 1 year (or since its inception). It's unclear what shares will do as investors wait for a possible cut, but long-term investors should be encouraged by what looks like a better business strategy.1 year Lumen Technologies Forecast: 2.9844187007013 * About the Lumen Technologies, Inc. But shareholders may have to sacrifice the dividend entirely or in part to see those gains. If Lumen becomes more like Charter and less like AT&T, the stock could go up a lot. ![]() However, off-loading low-growth businesses to invest in newer growth segments will transform the business model. Lumen's revenue has been declining as mature technologies decline while new technologies in fiber, edge computing, and cybersecurity ramp up. Yet if recent history is any guide, telecom stocks without dividends that have instead chosen to invest in growth and make share repurchases (such as Charter Communications) have done much better than telecoms like AT&T that have paid out a high dividends perhaps at the expense of growth investments and efficient repurchases. While the company isn't cutting its dividend now, it very well might once the transactions close. Of course, this might come at the expense of the dividend. Investing in proven fiber projects to enable quicker growth should increase the intrinsic value of the stock, and repurchasing shares at a discount to intrinsic value will also be a value-add for shareholders. In that light, investments in growth and the share repurchase make a lot of sense. if Lumen can figure out a way to grow again. Obviously, the company's $31.5 billion in debt is also weighing on the stock, but that's still a ratio of enterprise value to free cash flow of 14. Lumen just increased its free cash flow projections for 2021 to a range of $3.1 billion to $3.3 billion, and its market cap is only $13.3 billion, for a ratio of price to free cash flow in the low 4 range, which is very cheap. But a dividend cut could help the stock long term Obviously, a statement like that will make investors nervous that the company will cut its dividend, once these transactions take place next year. I do realize that will put pressure on our dividend after we close these transactions and the further we get into our investment program." In addition, given the low price of the company's stock relative to its cash flow, management also announced a $1 billion share repurchase program over two years.īut in light of the higher fiber-optic investments and the repurchase, Storey also noted: "with these transactions, the profile of our business is changing and will change rapidly going forward as we lean into investing for growth and continuing to rationalize the portfolio. In addition, CEO Jeff Storey announced the company would be stepping up investments in fiber-optic cable with the new cash, as modern fiber investments have yielded clear results in the recent past. ![]() ![]() In the wake of these transactions, which management expects to close in the first half of 2022, Lumen will off-load some higher-cash-flow but lower-growth assets to others, while retaining assets that have a better growth profile.
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