UPDATE: Nomura Downgrades CenturyLink to Reduce on Cash Flow and Operational Issues

Nomura downgraded CenturyLink CTL from Buy to Reduce and lowered the price target from $45.00 to $30.00. Nomura said, "With a 25% dividend cut and disappointing FCF outlook for the next several years, we are downgrading CenturyLink shares from Buy to Reduce and lowering our target price from $45 to $30. Management‟s outlook confirmed our concerns of limited cash flow flexibility, a product of a changing revenue mix, lower incremental synergy savings, and higher capital spending. Our target price is based on our DCF analysis, and represents a 7% yield on the reduced dividend. Guidance for capital spending was worse than our forecast. This leads to a declining outlook for free cash flow in 2013, which worsens as CenturyLink becomes a full cash tax payer in 2015. CenturyLink‟s exposure to legacy Consumer and Enterprise revenue continues to weigh on the company‟s ability to post revenue growth." CenturyLink closed at $ on Wednesday.