![]() The company also highlighted that such cables "represent less than 10% of its copper network," suggesting that the uncertainties could have been overstated.Īs such, I believe the market's positive reaction to LUMN in yesterday's (July 19) trading session, as it closed up nearly 17% suggests that dip buyers saw the recent lows as an opportunity to return strongly. Furthermore, AT&T CEO John Stankey indicated his disagreement with the Wall Street Journal's (or WSJ) reporting, stressing that " it conflicts with what independent experts have stated about the safety of lead-clad telecom cables." However, I assessed that the developments are still nascent, suggesting that investors shouldn't jump to quick conclusions over the possible extent of the liabilities. If that wasn't bad enough, the recent lead-covered cables fiasco has intensified the negative sentiment surrounding LUMN and its Telco peers, given the potentially significant liabilities involved. However, given Lumen's high CapEx outlook of $3B at the midpoint, it's challenging to see how the company could significantly overcome the less optimistic analysts' projections, given the current macro uncertainties.Įlevated interest rates and a weaker commentary by AT&T ( T) recently have worsened the outlook for the major Telco players, including Lumen. Accordingly, analysts expect Lumen to post an FY23 adjusted EBITDA of $4.64B, markedly below the midpoint of management's guidance range of $4.7B. I gleaned that the pessimistic Wall Street estimates seem sufficiently low for management to clear the bar more easily. In other words, things for LUMN could get worse for the bagholders if the market continues to give its vote of "no confidence" in Lumen's turnaround strategy. While the metric is elevated, I don't consider it excessively high, which is unlikely to result in a massive short squeeze. ![]() Therefore, I'm not surprised that LUMN bears are still holding on to their winning position, as it posted a short interest as a percentage of float of nearly 15% at the end of June. As such, the bears in LUMN have won decisively. Investors who boarded five years later posted a worse 5Y total return CAGR of -32.3%. Investors who held LUMN over the past ten years posted a total CAGR of -19.5%, significantly underperforming the S&P 500 ( SPX ). ( NYSE: LUMN) have been hammered, as the stock has proven to be a vehicle of massive portfolio value destruction. Investors still holding the bag in Lumen Technologies, Inc.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |