Jefferies Maintains Buy Rating, $12 PT On ELNK

Jefferies is maintaining its Buy rating and its price target of $12 on Earthlink ELNK investor meetings with the company's management yesterday. Jefferies reports, “We walked away cautiously optimistic on mgmt's new strategy of leveraging its growing fiber network to offer differentiated IP-based managed services to multi-locations businesses, taking advantage of exponential data growth…We believe mgmt is on its way to creating a viable IP-based value-added services provider to corporate clients, and we expect shares to react positively as ELNK successfully integrates ITC DeltaCom and One Comm, and cost synergies are realized. Shares are trading at 3.3x 2011E EBITDA, the lowest multiple in our coverage universe. The $0.05/sh dividend also appears safe for now.” ELNK closed yesterday at $7.95.