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Lumen Technologies Inc Ordinary Shares LUMN

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lumen Continues Executing Its Vision in Q3, Moderating Revenue Declines and Expanding Margins

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Lumen again exceeded FactSet consensus revenue and profit estimates in the third quarter, and unlike the second quarter, where we thought some revenue benefits were unsustainable, we expect much of the progress this quarter to be repeatable. While sales remain on the downtrend, the firm continues to extract cost savings, produce significant amounts of cash, and strengthen its balance sheet, leaving the stock too cheap in our view. We are maintaining our $18 fair value estimate.

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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. The merger further shifted the company’s operations toward businesses (now 75% 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 nearly 5 million broadband customers.

Contact
100 CenturyLink Drive
Monroe, LA, 71203
T +1 318 388-9000
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 39,000

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