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RBC Capital upgraded its outlook on Lumen Technologies (NYSE:LUMN) on Monday, raising the stock’s price target to $1.75, from $1.25 previously. The company maintained a Sector Perform rating on the stock.
The adjustment follows Lumen’s announcement of financial results that exceeded expectations, along with the company’s initial forecast for 2024. The results reflect the benefits of a transition services agreement (TSA) which, according to RBC Capital , gives Lumen additional time to advance its recovery efforts. .
RBC Capital’s revised price target is based on an asset-based valuation methodology. This approach takes into account Lumen’s tangible and intangible assets to arrive at the new target.
Lumen’s recent performance and initial forecast for next year were critical factors in RBC Capital’s reassessment of the stock’s value. TSA’s contribution in providing a “longer runway” for the company’s management to implement its strategic plans was specifically highlighted by the company.
Lumen Technologies, which operates in the telecommunications sector, has been working on a turnaround strategy to improve its financial position and market performance. RBC Capital’s endorsement suggests a cautiously optimistic view of the company’s progress and future prospects.
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