Will Windstream Holdings Weather Last Week’s Storm?



What happened to Windstream’s shares?

Windstream Holdings (WIN) stock fell 13.2% last week (ended March 24, 2017) after a 5.6% decline on Wednesday, March 22, following a reinstated a “sell” rating on the stock from Goldman Sachs (GS) and a weak outlook for telecom firms like Frontier Communications (FTR) and Century Link (CTL).

In the previous part of this series, we discussed how Goldman Sachs expressed concerns of the sustainability of FTR. To be sure, the telecom sector is expected to face a difficult calendar 2017 driven by lower broadband subscriptions.

Windstream stock has fallen 27.3% over the trailing-12-month period, -25% in the trailing one month period, and -25% year-to-date. The stock is now trading at $5.45.

Notably, the stock also fell 14.2% in the week ended March 10, 2017, on poor 4Q16 results, with service revenues falling 7% YoY (year-over-year) to $1.29 billion. The company’s product revenues fell a significant 48% YoY to $20 million.

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How do analysts see Windstream now?

Analysts expect Windstream’s revenue to rise 12% YoY (year-over-year) in fiscal 1Q17 to 1.54 billion and 11.8% YoY in fiscal 2Q17 to $1.52 billion.

Of the 11 analysts covering Windstream Holdings, two recommend a “buy,” while three recommend a “sell,” and six recommend a “hold.” The average stock price target is $8.38, with a median target of $7. This means that Windstream is now trading at a significant discount of 57% to median analyst estimates.

In the next part, we’ll discuss what happened with Snap (SNAP) last week.


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