UPDATE: Jefferies Initiates Lumos Networks with Buy on Transition Period

In a report published Wednesday, Jefferies analyst Thomas Seitz initiated coverage on Lumos Networks Corp.

with a Buy rating and $15.00 price target. In the report, Seitz noted, “Spun-off from NTELOS in October 2011, Lumos operates a 5,800 route-mile competitive fiber network in six states – VA, WV, PA, MD, OH, and KY – and has a legacy RLEC business in three rural counties of Virginia. Leveraging its RLEC infrastructure, LMOS has an 'edge-out‛ strategy for the fiber business where incremental investments are made only on proven customer demand. LMOS has been getting traction in the education, healthcare, financial, and government verticals. It also provides wholesale connectivity to wireline and wireless operators – VZ accounts for ~10% of its revenues; NTLS is the second largest customer, largely for cellular backhaul. LMOS has also invested in a fiber-to-the-home initiative that passes 16k homes. In our view, long-term growth will undoubtedly be driven by fiber.” Lumos Networks Corp. closed on Tuesday at $13.51.