ERIC - CommScope stock dips after Deutsche Bank cuts to Hold
2023-07-18 08:39:35 ET
CommScope ( NASDAQ: COMM ) was downgraded by Deutsche Bank to Hold from Buy and reduced its price target to $6 from $8.
Deutsche analysts noted that lingering pressure on customer orders, with recent data points ( ( ERIC )/ Nokia ( NOK ) pre-announcements, Corning ( GLW ) intra-quarter commentary, lead-sheathed copper overhangs for Telcos) suggests that the lull could continue in the interim.
The analysts added that there are more meaningful downside risk to consensus estimates, with a view that Commscope's 2024E Core Adjusted EBITDA targets are likely to be revised lower.
In addition, the downgrade was also due to a slower de-leveraging path, with 7x leverage today and "higher for longer" interest rates presenting incremental risks to FCF over the next several years, according to the analysts.
The analysts said that they are struggle to find a positive catalyst for shares near-term, and think that simple "hopes" for a meaningful resurgence in orders (or near term estimates) do not provide a basis for maintaining a Buy rating on the shares in the interim.
COMM -2.31% to $5.08 premarket July 18
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CommScope stock dips after Deutsche Bank cuts to Hold