Why Frontier Communications Corp Stock is Falling (Again) Today

Frontier Communications Corp (NASDAQ:FTR) stock was hit hard on Friday after an update from an analyst.

Why Frontier Communications Corp (FTR) Stock is Falling (Again) Today
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The analyst behind this update is Bank of America/Merrill Lynch’s David Barden. In a recent research note, the analyst cut his price target for FTR stock from $19 to $4. The stock was sitting at $7.96 when the markets closed on Thursday.

The reason for the price target update has to do with Frontier Communications Corp’s current dividend policy. The company is paying out a dividend of 60 cents per share to investors every quarter. FTC won’t likely be able to keep this dividend up as its struggles to reduce its $17.7 billion in long-term debt. There’s talk that it may have to drop its dividend entirely before all is said and done.

The negative research note concerning Frontier Communications Corp comes even after a stock split and reduction to its dividend earlier this year. The problem also means that any further reduction in its current dividend will likely result in investors of FTC stock getting rid of their shares, reports The Motley Fool.

FTR stock also took a beating last week after releasing its earnings report for the third quarter of the year. The communications company reported losses per share of $1.10 on revenue of $2.25 billion for the quarter. Wall Street was looking for it to report losses per share of $1.09 on revenue of $2.25 billion in the third quarter of the year.

FTR stock was down 13% as of Friday afternoon and is down 86% year-to-date.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2017/11/frontier-communications-corp-stock-drops-on-price-target-cut/.

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