Pivotal Research Starts Level 3 Communications (LVLT) at Buy
"Pivotal Research initiates coverage on Level 3 Communications (NYSE: LVLT) with a Buy. PT $30.00.
The firm comments, "We think that strong bookings over the past few quarters will translate into acceleration in Core Network Services revenue in Q4 ’12 and 2013. GBLC deal synergies appear on schedule and should help drive a 200 bps improvement in EBITDA margin in 2013 vs. 2012. Along with lower interest costs on LVLT’s debt, the improved topline and EBITDA trends will help LVLT reach a key inflection point in generating positive free cash flow for full year 2013 based on our estimates. In the shorter term, current consensus for Q4 adjusted EBITDA is already below the midpoint of management guidance, so the risk/reward for the stock heading into Q4 appears favorable in our view."