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CenturyLink (CTL) Gains But Lags Market: What You Should Know

Zacks Equity Research

CenturyLink (CTL) closed at $11.54 in the latest trading session, marking a +0.35% move from the prior day. The stock lagged the S&P 500's daily gain of 1.42%. Elsewhere, the Dow gained 1.42%, while the tech-heavy Nasdaq added 1.4%.

Heading into today, shares of the communications company had lost 3.04% over the past month, lagging the Computer and Technology sector's gain of 1.95% and the S&P 500's gain of 0.38% in that time.

Wall Street will be looking for positivity from CTL as it approaches its next earnings report date. On that day, CTL is projected to report earnings of $0.32 per share, which would represent year-over-year growth of 6.67%. Our most recent consensus estimate is calling for quarterly revenue of $5.55 billion, down 4.56% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.35 per share and revenue of $22.30 billion. These totals would mark changes of +13.45% and -5.43%, respectively, from last year.

Any recent changes to analyst estimates for CTL should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CTL is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, CTL is holding a Forward P/E ratio of 8.51. This represents a discount compared to its industry's average Forward P/E of 15.49.

Also, we should mention that CTL has a PEG ratio of 0.8. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CTL's industry had an average PEG ratio of 2.34 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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