UPDATE: D.A. Davidson Reiterates Neutral Rating, Raises PT on Level 3 Communications Following Model Update

In a report published Friday, D.A. Davidson analyst Donna Jaegers reiterated a Neutral rating on

, and raised the price target from $23.50 to $25.50. In the report, D.A. Davidson noted, “On August 29th, LVLT announced a 6.5% global headcount reduction that equates to almost 700 people. The goal of the cut is to streamline LVLT's organization. Most of the cuts will come in non-customer facing jobs, although the bottom quintile of the sales force is also under review. In the U.S., the majority of the cuts have already taken place, and internationally they will happen by the end of September. LVLT will take a Q3 severance charge of ~$30 million or $0.14 per share, according to the 8-K filed today. We expect $45-$50 million in annual SG&A savings due to the cuts and have added the one time severance expense into our model.” Level 3 Communications closed on Thursday at $25.49.