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Article Update For "Will A Level 3 Communications And A CenturyLink Combination Provide Value?"

|Includes: CenturyLink, Inc. (CTL), LVLT

In my December 31 comment (in the comments section of the title article) I updated the revenue estimates per management's expectations for the years preceding 2020. I also launched an interactive model where you could revise the following metrics to suit your own views:

  • CTL Strategic/Data growth
  • CTL Legacy services growth
  • LVLT CNS enterprise growth
  • LVLT Wholesale/other growth
  • Cap Ex % Rev.
  • Comm. Margins
  • P/Rev ratio
  • PE x ratio
  • EV/EBIDTA ratio
  • FCF multiple ratio

While the 2020 endpoint does not change, the picture through 1Q18 does showing declining revenue before revenue opportunities from the combination start to show and/or slowing the decline in the legacy services enough not to offset all gains in the other categories. It does stretch the FCF payout ratio in the early years as depicted below.

Other recent news from:

http://247wallst.com/investing/2016/12/22/merrill-lynch-has-4-buy-rated-stocks-for-2017-that-yield-at-least-7/?yptr=yahoo

"…CenturyLink investors are paid a gigantic 9.09% dividend. The Merrill Lynch price target for the stock is $42…"

https://www.benzinga.com/stock/ctl/ratings

1/03/17 - JP Morgan - Upgrades CTL to Overweight - Target: 28.0

Disclosure: I am/we are long LVLT.