UPDATE: JP Morgan Downgrades CenturyLink to Neutral on Valuation, Soft Outlook

JP Morgan downgraded CenturyLink (NYSE: CTL) from Overweight to Neutral and lowered the price target from $45.00 to $38.00.

JP Morgan said, "We downgrade shares of CenturyLink from Overweight to Neutral following the company's revision of its capital allocation strategy, which included a ~25% dividend cut from $0.725/share to $0.54/share, as well as a new $2b share repurchase program to be completed over the next 2 years. While we believe the revised plan gives the company more flexibility to improve the fundamentals of the business in the near to medium term, we believe there is limited upside for the stock even from after hours trading levels off ~13%. We downgrade CenturyLink from Overweight to Neutral and reduce our year end 2013 price target from $45 to $38."

CenturyLink closed at $41.69 on Wednesday.