Benchmark Reiterates Buy, $6 PT on Cincinnati Bell; Solid Q1, CyrusOne IPO
Benchmark reiterates its Buy rating and $6 price target on Cincinnati Bell (NYSE: CBB) following solid results for Q1 and the announcement of the CyrusOne IPO.
Benchmark notes, "CBB reported solid 1Q12 results and announced it plans to IPO CyrusOne. We maintain that this event could unlock material trapped value. Full year guidance was reiterated; our estimates are essentially unchanged. …At yesterday's closing price, CyrusOne is materially discounted. Assuming 5.5x or 6.0x for CBB's 2012E telecom EBITDA, CyrusOne is valued at only 8.5x or 6.7x its 2012E EBITDA. Data center peers average 13x with no public comparable below 10x. REITs are typically at the high-end with Digital Realty at 14x."
CBB closed at $3.65 on Thursday.
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