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Frontier’s Burn Last Week: The Story behind the Story

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Frontier’s stock fall last week

Shares of US-based (SPY) tech (QQQ) firm Frontier Communications (FTR) fell 15.4% last week (ended March 24, 2017), falling 10% on March 22 alone after investment bank Goldman Sacks (GS) downgraded its shares on concerns over FTR’s dividend sustainability.

In a research note, Goldman analyst Brett Feldman stated: “We believe FTR may choose to suspend its dividend after 1Q17 in order to deliver and build liquidity to address significant debt maturities in 2020-2022, even if it is not required to do so per its bonds’ covenants.”

The stock recovered partially, however, on March 24, rising 7.7% to close at $2.09.

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A volatile calendar 2017 for FTR?

FTR shares have been in a downward spiral. The stock fell 17.2% in February 2017 and ~20% in 2016. The stock has returned -60% over the trailing-12-month period and -38% over the trailing one-month period.

Notably, the stock fell 10.9% on February 28, 2017, after the firm announced disappointing 4Q16 results.

Analyst recommendations

Of the 15 analysts covering FTR, five recommend a “buy,” two recommend a “sell,” and eight recommend a “hold.” The average stock price target is $3.4, with a median target of $3.5. FTR is trading at a significant discount of 67% to median analyst estimates.

Continue to the next part for a look at what just happened with Windstream Holdings stock.

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