UPDATE: Jefferies Initiates FairPoint Communications with Hold on Continuing Turnaround

In a report published Wednesday, Jefferies analyst Thomas Seitz initiated coverage on FairPoint Communications (NASDAQ: FRP) with a Hold rating and $8.00 price target.In the report, Seitz noted, “Since its emergence from bankruptcy proceedings, FairPoint has followed a four-pronged strategy to increase shareholder value – improve operations, change the regulatory environment particularly in Northern New England (NNE), transform the business model and grow revenues, and execute human resource strategy. In our view, the operational improvements to date – including service quality enhancements, productivity gains, workforce rationalization, and leveling the regulatory playing field – have created the foundation for FairPoint to slow near-term revenue decline and grow the top line over the medium-to-long term. FRP shares trade at a discount to the other regional telcos – such as CenturyLink, Windstream, and Frontier – largely because FRP does not pay any dividends and is not widely followed on the Street.”FairPoint Communications closed on Tuesday at $8.00.