UPDATE: Morgan Stanley Resumes Cincinnati Bell at Equal-Weight on IPO Stake
Morgan Stanley resumed coverage of Cincinnati Bell (NYSE: CBB) with an Equal-weight rating.
Morgan Stanley noted, "Cincinnati Bell benefits from its 69% ownership stake in CyrusOne, but our estimates suggest that secular pressures at the core business may affect free cash flow generation and keep leverage levels above 3.0x, hampering management's ability to pay a regular dividend. Fioptics helps stabilize wireline revenues in 2013, but wireless substitution and cable competition drive revenues down at ~1.2% CAGR going forward. Meanwhile, the lack of an iPhone and an LTE network is likely to challenge subscriber trends, as roaming costs drive down margins ~200 bps per year."
Cincinnati Bell closed at $4.72 on Monday.
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