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

Zacks Equity Research

CenturyLink (CTL) closed the most recent trading day at $11.73, moving +0.86% from the previous trading session. This change lagged the S&P 500's 1.09% gain on the day. Meanwhile, the Dow gained 1.21%, and the Nasdaq, a tech-heavy index, added 1.34%.

Prior to today's trading, shares of the communications company had lost 14.04% over the past month. This has lagged the Computer and Technology sector's loss of 0.65% and the S&P 500's loss of 1.17% in that time.

Investors will be hoping for strength from CTL as it approaches its next earnings release, which is expected to be November 6, 2019. In that report, analysts expect CTL to post earnings of $0.32 per share. This would mark year-over-year growth of 6.67%. Meanwhile, our latest consensus estimate is calling for revenue of $5.55 billion, down 4.56% from the prior-year quarter.

CTL's full-year Zacks Consensus Estimates are calling for earnings of $1.35 per share and revenue of $22.30 billion. These results would represent year-over-year changes of +13.45% and -5.43%, respectively.

It is also important to note the recent changes to analyst estimates for CTL. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CTL is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, CTL currently has a Forward P/E ratio of 8.6. For comparison, its industry has an average Forward P/E of 13.96, which means CTL is trading at a discount to the group.

Meanwhile, CTL's PEG ratio is currently 0.81. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Wireless National stocks are, on average, holding a PEG ratio of 2.36 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 101, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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