Back to top

Analyst Blog

Zacks Equity Research

Windstream Retains Neutral Tag

WIN CBEY

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We are maintaining our Neutral recommendation on Windstream Corporation (WIN - Analyst Report) highlighting a strong operational base that will drive growth in business and consumer channels with the addition of high-speed Internet customers and enhanced promotional strategies. However, competitive threats, a highly leveraged balance sheet, continued access-line erosion and diminishing wholesale business keep us from becoming positive on the stock.

Why the Reiteration?

We remain optimistic that Windstream’s focus on expanding its service offerings to businesses with VoIP services, data bundles, cloud and managed services; data center co-location; fiber transport as well as increasing distribution channels will return positive results in the near term. With respect to broadband expansion, the company is targeting to enhance its coverage and increase speed in various areas.

Little Rock, Arkansas-based Windstream has adopted a number of steps to broaden its business horizon. In an attempt to expand its line-up of data centers, the company will set up a new data center at the Franklin, Tennessee campus just outside Nashville. The company will continue to invest in long-term growth initiatives such as fiber-to-the-tower (FTTT) deployment and broadband network capability to support incremental revenue.

On the flip side, Windstream faces the major risk of access lines losses that are negatively affecting its revenue in the wireline business unit. Regulatory issues coupled with the constant pressure of technology innovation and next-generation product and service offerings are the other headwinds.

We witnessed no earnings momentum for the stock over the last 30 days. The Zacks Consensus Estimates for the fourth quarter and full year 2012 are currently pegged at 13 cents and 49 cents per share, respectively. This reflects year-over-year decrease of 33.2% and 37.1% for the quarter and full year.

Other Stocks to Consider

A stock, within the wireline rural segment, worth considering is Cbeyond Inc (CBEY - Snapshot Report) and it carries a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%