Deutsche Bank Maintains Buy on tw telecom Inc.
Deutsche Bank reiterates its Buy rating on tw telecom Imc. (NASDAQ: TWTC) following 3Q results that confirmed outlook for accelerated revenue growth. Current PT is $25 per share.
According to Deutsche Bank, growth acceleration continued “due to strong demand for the carrier's core Ethernet and VPN services. While margins were a little soft, this was mostly due to higher spending associated with YoY growth in bookings. In our view, these trends point to improved revenue visibility and should eventually lead to higher incremental EBITDA and cash flow margins as the carrier converts its sales funnel and increases penetration of new fiber connected buildings. … we expect revenue growth to ramp to 8.0% in 4Q (from 7.5% in 3Q) and to 8.2% in '12 (from 7.3% in ‘11 and 5.1% in '10). Our outlook does not assume any material improvement in the economy, which management believes could propel top line growth into the double-digits (over time).”
TWTC closed at $18.08 on Tuesday.
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