DA Davidson Downgraded AboveNet (ABVT) to Neutral, Cuts Price Target to $58
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Price: $84.00 --0%
Rating Summary:
0 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 7 | New: 31
Rating Summary:
0 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 7 | New: 31
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DA Davidson downgraded shares of AboveNet, Inc. (Nasdaq: ABVT) to a Neutral rating today, from its previous rating of buy, and cut its price target from $80 to $58.
The firm believes that IT budgets in 2012 will begin to experience some restraints which in turn will cause investors be more cautious in the competitive telecom sector.
Since telecom service companies usually lag the economic cycle, the firm doesn't forecast any major warning signs until later fall when companies begin finalizing their IT budgets.
One risk that the firm notes is that one third of the company's total revenue is derived from the financial service industry.
An analyst at DA Davidson comments, "Our downgrade is based on our expectation that valuations in the CLEC group will contract. However, we continue to expect ABVT can grow through a recession and that their business of providing large Ethernet connections will continue to show secular growth as enterprise customers move to cloud computing and need faster connections to their data centers."
The firm believes that IT budgets in 2012 will begin to experience some restraints which in turn will cause investors be more cautious in the competitive telecom sector.
Since telecom service companies usually lag the economic cycle, the firm doesn't forecast any major warning signs until later fall when companies begin finalizing their IT budgets.
One risk that the firm notes is that one third of the company's total revenue is derived from the financial service industry.
An analyst at DA Davidson comments, "Our downgrade is based on our expectation that valuations in the CLEC group will contract. However, we continue to expect ABVT can grow through a recession and that their business of providing large Ethernet connections will continue to show secular growth as enterprise customers move to cloud computing and need faster connections to their data centers."
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