Bank of America Reiterates Buy Rating, $38 PT on CenturyLink on Wireline Stocks

In a report published Wednesday, Bank of America analyst David W. Barden reiterated his Buy rating and $38.00 price target on CenturyLink (NYSE: CTL).

In the report, Barden noted, “We view yield-based wireline stocks as the equivalent of equity bonds, where the required return (yield) is a function of relative risk (FCF payout ratio). Within this framework, CTL screens positively among yield stories, at a 6.7% yield from a 44% 2014E payout ratio. Our PO, which has an assumed yield of 5.7%, reflects the company's improving top-line trajectory and greater-than-average dividend coverage.”

CenturyLink closed on Tuesday at $34.38.