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CenturyLink (CTL) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, CenturyLink (CTL) closed at $11.64, marking a -0.51% move from the previous day. This change lagged the S&P 500's 0.29% gain on the day. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq added 0.22%.

Heading into today, shares of the communications company had gained 13.15% over the past month, outpacing the Computer and Technology sector's gain of 7.66% and the S&P 500's gain of 7.86% in that time.

Investors will be hoping for strength from CTL as it approaches its next earnings release, which is expected to be August 7, 2019. In that report, analysts expect CTL to post earnings of $0.32 per share. This would mark year-over-year growth of 23.08%. Our most recent consensus estimate is calling for quarterly revenue of $5.63 billion, down 6.73% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.32 per share and revenue of $22.46 billion. These totals would mark changes of +10.92% and -4.77%, respectively, from last year.

Any recent changes to analyst estimates for CTL should also be noted by investors. Recent revisions tend to reflect the latest 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection remained stagnant. CTL is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CTL is currently trading at a Forward P/E ratio of 8.87. This valuation marks a discount compared to its industry's average Forward P/E of 15.26.

It is also worth noting that CTL currently has a PEG ratio of 1.02. 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. Wireless National stocks are, on average, holding a PEG ratio of 2.08 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 51, which puts it in the top 20% 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.

To follow CTL in the coming trading sessions, be sure to utilize Zacks.com.

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