UBS Upgrades Qwest (Q) As A Likely Takeover Candidate
December 16, 2009 9:50 AM
UBS (NYSE: UBS)(FREE stock trend analysis) upgraded Qwest Communications International Inc. (NYSE: Q)(FREE stock trend analysis) to buy from neutral and reported that the company could be a takeover candidate for one of the rural telephone operators.
The shares of Qwest rose by as much as 5 percent after the upgrade. The report also cited the company's stable cash flow, improving revenue trends and the attractive valuation as the factors for its upgrade.
Analyst Mr. John Hodulik wrote, "Despite its much larger size, we believe Qwest could become a takeover candidate for one of the rural local exchange carriers like CenturyLink (NYSE: CTL)(FREE stock trend analysis) or Windstream Corporation (NASDAQ: WIN)(FREE stock trend analysis), looking to gain scale". There is a rapid consolidation happening in the rural telephone market where the operators have to merge in order to grow in revenue. Earlier in November, Windstream Corp (NASDAQ: WIN)(FREE stock trend analysis) agreed to buy Iowa Telecommunications (NYSE: IWA)(FREE stock trend analysis).
