UPDATE: Citigroup Downgrades Cbeyond to Neutral

Citigroup lowers its rating on Cbeyond (NASDAQ: CBEY) to Neutral from Buy based on recent out-peformance on share price that leaves little upside to current price target of $10, which is reiterated.

Citigroup notes, "We believe consensus revenue and OIBDA for '12 may fall heading into the company's release of 4Q results, based on our unchanged forecasts. The share price is up over 45% over the last three months vs. the S&P 500 up 6.6% and the Telecom S&P 500 sub-sector is roughly flat over the same period. While CBEY's firm value remains at the lower-end of its peer group range at ~3x our 2012 OIBDA estimate, our forecast for FCF yield has faded to closer to 10%, which we view as a fair level in the near-term until visibility improves with respect to the future growth prospects for its restructured business strategy."

CBEY closed at $9.35 a share on Friday.