AUSWR
The Association of U S West Retirees
 

 

 

Qwest stock rises on analyst upgrade
By Andy Vuong, Staff Writer
Denver Post
Saturday, June 9, 2007

Qwest stock shot up today after a Bank of America analyst upgraded the company and stated that improved cash flow could lead to a dividend or another share buyback.

"Qwest is growing and has grown its business more substantially than other" local exchange carriers, Bank of America analyst David Barden said in a research note.

Barden upgraded Denver-based Qwest from "neutral" to "buy" and raised his target price on the company's stock from $8.50 to $12.

Qwest stock was up 32 cents to $10.09 during midday trading, regaining nearly all of its losses from Thursday when the markets took a hit amid rising interest rates.

Barden said what differentiates Qwest from its peers is its "enterprise data and Internet business," which is growing by about 7 percent.

"Qwest has the willingness and the financial wherewithal to return cash to stockholders," Barden said.  "The company is currently in the midst of a $2 billion stock buyback that should conclude by the third quarter of 2008.  The company has been clear that it views this initial return of capital as the 'beginning, not the end' of cash distributions to stockholders."

Barden noted that his views on Qwest could be negatively impacted if the company decides to spend capital on a broad video strategy to better compete against cable companies rather than reward shareolders with a dividend or another share buyback.

Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.

http://www.denverpost.com/business/ci_6093908