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Frontier Stock Continued Its Downward Spiral Last Week

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Dec. 26 2017, Updated 10:50 a.m. ET

Frontier stock fell 13.6% last week

Frontier (FTR) fell 13.6% in the week ended December 22, 2017, to close at $6.98. Frontier is now trading 14.8% above its 52-week low of $6.08 and 88% below its 52-week high of $57.3. FTR stock has fallen drastically this year driven by a string of poor quarterly results. Peer companies Comcast (CMCSA), CenturyLink (CTL), and Windstream (WIN) have generated returns of 15%, -28%, and -74% in the last one year, respectively.

FTR fell almost 30% in November 2018 as well. The stock fell 24% on November 1, 2017, after disappointing 3Q17 results. Further, FTR also announced a dividend of $0.60, indicating a yield of 26%, which didn’t please investors very much.

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Revenue fell 11% YoY in 3Q17

FTR’s revenue fell 11% YoY (year-over-year), while EPS (earnings per share) fell to -$1.18, which was lower than analyst estimates of -$1.15. FTR has seen a rapid decline in profitability over the last few quarters. Bank of America (BAC) analyst David Barden cut the firm’s 12-month price target from $19 to $4 due to FTR’s unsustainable dividend yield. FTR has over $17 billion in long-term debt.

Of the 16 analysts covering FTR, three recommend a “buy,” five recommend a “sell,” and eight recommend a “hold.” Analysts have an average 12-month price target of $13.34 with a mean target of $11, which indicates that the stock is trading at a discount of 58% to analyst target estimates.

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