UPDATE: DA Davidson Reduces PT to $16.50 on Consolidated Communications Holdings on Higher Cost Debts
DA Davidson lowers its price target on Consolidated Communications Holdings (NASDAQ: CNSL) from $19 to $16.50 as it keeps shares at a Neutral rating.
DA Davidson says, "With the proposed acquisition of SURW, CNSL improves its mix of businesses toward less regulated, higher growth areas. We think CNSL will sustain its dividend through 2013, but with likely higher interest costs exiting 2014, we are hesitant to get more aggressive on the stock until we see how the SURW integration goes. We maintain our NEUTRAL rating, but our price target falls to $16.50 from $19.00 due to the decline in valuations for the rural telco group. Our $16.50 price target equates to 6.5x our 2013 pro-forma EV/EBITDA estimate."
CNSL closed at $15.83 on Tuesday.
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