Is CenturyLink Stock a Good Option for You?

On April 1, CenturyLink (NYSE:CTL) stock fell 7.1% and closed at $8.79 with a market cap of $9.6 billion. The stock price has fallen 2.9% in the trailing five-day period, while it has fallen 28.9% in the trailing 12-month period.

Currently, CenturyLink stock is trading 42.6% below its 52-week high of $15.30 and 7.7% above its 52-week low of $8.16. On a YTD (year-to-date) basis, the stock has fallen by 33.5% as of Wednesday.

Analysts’ ratings for CenturyLink stock

On Thursday, Guggenheim analyst Mike McCormack upgraded CenturyLink stock to “neutral” from “sell.” According to a report from TheFly, “He believes near-term fundamentals are holding up well in the face of COVID-19 and estimates churn will be down in the Consumer business while Enterprise customers are adding capacity and government spending is also running strong.” The report also said, “He still believes long-term fundamentals are challenged, but cites valuation and a dividend yield of 11.4% with virtually no near-term risk as reasons for a higher rating.”

On Wednesday, Goldman Sachs analyst Brett Feldman downgraded CenturyLink stock to “sell” from “neutral.” The analyst also reduced its target price on the stock from $14 to $7. Last week, a Citigroup analyst downgraded the stock to “sell” from “neutral” with a target price of $6.

Among the 15 analysts that follow CenturyLink, two recommend a “buy,” six recommend a “hold,” and seven recommend a “sell.” As of Wednesday, analysts’ consensus mean target price is $12.02, which implies a 12-month return potential of 36.7%.

Financial performance

CenturyLink reported sales of $22.40 billion in 2019—a fall of 4.4% YoY (year-over-year) from sales of $23.4 billion in 2018. The company reported an adjusted EPS of $1.32 in 2019 compared to $1.19 in 2018. Wall Street analysts expected the company to report sales of $22.38 billion and earnings of $1.32 in 2019.

Wall Street analysts expect CenturyLink to report sales of $5.5 billion in the first quarter. The figure would mark a decrease of 3.0% YoY compared to $5.6 billion in the first quarter of 2019. Also, analysts expect the company to report an adjusted EPS of $0.35 in the first quarter compared to $0.34 in the first quarter of 2019. Currently, analysts expect a 3.5% and 2.5% fall in the company’s 2020 and 2021 sales, respectively. Analysts also expect an adjusted EPS of $1.38 and $1.45 in 2020 and 2021, respectively.

Last week, CenturyLink stated that it’s hard to quantify how the coronavirus outbreak impacts its business operations. The company will likely report its first-quarter results on May 6.

CenturyLink stock performance

CenturyLink stock closed 10.5% below its 20-day moving average of $9.82 on Wednesday. However, the stock was 27.5% and 32.5% below its 50-day and 100-day moving averages of $12.12 and $13.02, respectively. CenturyLink’s 14-day MACD is -0.43, which indicates a downward trading trend. With a 14-day RSI (relative strength index) score of 38, the stock is near the “oversold” zone.

CenturyLink has an upper Bollinger Band level of $12.00. The company’s middle Bollinger Band level is $10.00, while its lower Bollinger Band level is $8.00. On Wednesday, the stock closed near its lower Bollinger Band level, which suggests that it’s oversold.

At the end of Wednesday, CenturyLink’s dividend yield was 11.4%. As of 11:17 AM ET today, the stock was trading higher at 1.6%. The S&P 500 and the Dow Jones Industrial Average rose 1.9% and 1.7% at the same time, respectively. Read Can US Stock Markets Rise in Q2 after Q1 Crash? and Will the Dow Jones Crash Create a Double Bottom? to learn more.