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Lumen Technologies Inc Ordinary Shares - Stock Quote LUMN

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Morningstar's Lumen Technologies Inc Ordinary Shares Stock Analysis

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Lumen’s Q1 Results Were Poor Even After Filtering Noise, but Consumer Has Promise Post Divestitures

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Lumen’s revenue was weak, and its adjusted EBITDA margin was mildly disappointing during the first quarter. However, the firm’s fate rides on its prospects following big divestitures it plans to complete this year, and Lumen revealed several metrics that give comfort that its revenue and subscriber outlook will significantly improve in 2023 and beyond. Lumen now expects the sale of its incumbent local exchange carrier, or ILEC, business to occur in the fourth quarter rather than third and materially raised its full-year free cash flow and EBITDA guidance to account for the delay. While increased transparency is welcome, it doesn’t alter our view, and we are maintaining our $16 fair value estimate. We believe the stock is materially undervalued but think investors will have to be patient to see the business turn up.

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Lumen Technologies Inc Ordinary Shares's Company Profile

Business Description

With 450,000 route miles of fiber, including over 35,000 route miles of subsea fiber connecting Europe, Asia, and Latin America, Lumen Technologies is one of the United States’ largest telecommunications carriers serving global enterprises. Its merger with Level 3 further shifted the company’s operations toward businesses (over 70% of revenue) and away from its legacy consumer business. Lumen offers businesses a full menu of communications services, providing colocation and data center services, data transportation, and end-user phone and internet service. On the consumer side, Lumen provides broadband and phone service across 37 states, where it has 4.5 million broadband customers.

100 CenturyLink Drive
Monroe, LA, 71203
T +1 318 388-9000
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type High Yield
Employees 35,000

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