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Frontier Communications big loser on Nasdaq on Goldman downgrade
Frontier Communications (NASDAQ: FTR) dropped over 11% on Wednesday to $2.10 as investment titan Goldman Sachs downgraded the stock.
It went to ‘sell’ from ‘neutral’ and dropped the price target to $1.50 from $3.00.
The broker is concerned that the group’s weakening fundamentals may cause it to suspend its divi payment after the first quarter payout.
Analyst Brett Feldman was quoted as saying: “This is not because we believe that FTR will exceed the leverage ratio in its bonds’ covenants, which could require it to stop paying a dividend.
“Indeed, our forecasts indicate that FTR would remain just below the 4.5x covenant net leverage ratio over the next 5 years even if it maintains its dividend.
“Instead, we believe that FTR may choose to suspend its dividend in order to deliver and build liquidity so that it is able to repay and/or refinance material debt maturities in 2020-2022.”
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/175243/frontier-communications-big-loser-on-nasdaq-on-goldman-downgrade-175243.html
