UPDATE: Deutsche Bank Initiates Cincinnati Bell at Hold; Growth Leveraged to CyrusOne Stake
Deutsche Bank initiated Cincinnati Bell (NYSE: CBB) with a Hold rating and a $5.50 price target.
Deutsche Bank commented, "While our PT implies 17% upside potential, all of this is through the expected share price appreciation of CyrusOne (CONE, Buy, $22.67), which is 69% owned by CBB. We otherwise view CBB's core telecom ops as fairly valued at 6x ‘13E EBITDA (in-line with traditional telco peers). In other words, we see no NT advantage to owning CONE through CBB. Over the LT, we expect that CBB will sell-down its stake in CONE in order to repay debt thereby boosting FCF that may fund a dividend. But, this could take 3-5 years, so we do not see any immediate catalyst related to a potential recapitalization of CBB."
Cincinnati Bell closed at $4.72 on Monday.
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