LUMN - Lumen Technologies: The Turnaround Could Have Gone Better
2024-03-19 02:48:58 ET
Summary
- Lumen Technologies' stock is experiencing a fiasco in terms of value creation, with little positive financial change over the past few quarters.
- The company agreed with some of its creditors to extend most of its debt maturities to 2029 and beyond, which is good. But it's not enough.
- Lumen's financial position has not improved much, with negative EBIT and growing leverage ratios, making it difficult to achieve stability.
- LUMN may look cheap, but I think the likelihood of Lumen achieving the 2026 and beyond priced-in consensus figures is very low. That may explain the stock's cheapness.
- Speculators can try their luck and buy some LUMN stock in the hope that the positive trend in the bond market will spill over to the common stock and trigger mean-reversion dynamics. But I remain neutral.
Introduction
The stock of Lumen Technologies, Inc. ( LUMN ), the once a mid-cap largest telecommunications carriers company in the US, is currently experiencing a real fiasco in terms of value creation (or rather, destruction):