UPDATE: BMO Capital Markets Initiates Coverage on CenturyLink with Outperform Rating, $42 PT on Significant Opex Leverage

In a report published Thursday, BMO Capital Markets analyst Kevin Manning initiated coverage on CenturyLink CTL with an Outperform rating and $42.00 price target. In the report, BMO Capital Markets noted, “We are initiating coverage of CenturyLink with an Outperform rating and $42 price target. We believe there is significant opex leverage in the model as a result of ongoing integration and cost reduction efforts. Headcount was down 1,200 in 1Q13 sequentially, which we estimate is a $102 million expense reduction annualized. We believe company guidance for the rest of the year is conservative. We have some concerns about the data center business but believe other segments will more than make up for it. We don't see any further cuts to the quarterly dividend of $0.54 for 2013.” CenturyLink closed on Wednesday at $35.63.