COMM - CommScope dips again as Raymond James cuts to Underperform noting leverage

CommScope (NASDAQ:COMM) is 0.7% lower today alongside a downgrade to Underperform at Raymond James - a move it equates with "closing the barn door." It's a good company, and management has a plan, analyst Simon Leopold writes. Yet "it faces challenges with increasing input costs, and we worry that aggressive cost cuts could protect cash flow, yet jeopardize its future." The move isn't a call on the quarter, where Leopold expects sales to beat consensus and EPS in line. Without incremental cost cuts, however, CommScope can cover interest expense but disappoint on earnings expectations, the firm says. And it could face challenges repaying debt in 2025 and 2026. Demand trends look healthy and backlog is strong (book-to-bill ratio at 2021's end was 1.3x). But the valuation will be burdened by high leverage, adding risk to a low price/earnings stock. CommScope has sunk 69% from a 52-week high it reached last

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CommScope dips again as Raymond James cuts to Underperform, noting leverage