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In a report published Wednesday, Oppenheimer analyst Timothy Horan downgraded the rating on TW Telecom
TWTC from Outperform to Perform, and removed the $30.00 price target.
In the report, Horan noted, “TWTC reported 1Q13 results in line with our estimates but below the Street, and management dampened near-term expectations. The company is trading at 9x our 2013 EBITDA estimate with EBITDA growth now at 3% for the year; we were previously at 7% growth. The company has guided to higher operating expenses over the next few quarters to roll out its new suite of products and expand its sales force. It will take some time for this to positively impact revenues. Long-term, we believe that TWTC's unique network assets make it a critical component of the ongoing shift to cloud and that it's well positioned for close to 10% EBITDA growth.”
TW Telecom closed on Tuesday at $27.19.
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