Lumen Technologies Completes $5.75B Sale to AT&T
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6d ago
0mins
Should l Buy LUMN?
Lumen Technologies (LUMN) announced that it has completed the sale of its Mass Markets fiber-to-the-home business in eleven states, including Quantum Fiber, to AT&T (T) for $5.75B in cash. The sale includes substantially all of the related consumer fiber access network and customer relationships in those states, which serves more than 1 million fiber customers and reaches more than 4 million enabled fiber locations. The completed transaction is another strategic milestone in Lumen's transformation into the leading enterprise digital networking services company built for the multi-cloud, AI-driven economy. Lumen plans to apply approximately $4.8B of the transaction proceeds and cash on hand to retire all super priority debt, reducing the company's interest expense by approximately $300M annually and accelerating its transformation strategy. The completed transaction is expected to reduce the company's debt to less than $13B with a net debt to adjusted EBITDA ratio of below 4x. As part of the completed transaction, Lumen will retain assets that will continue to serve as the foundation of its enterprise transformation, including all national, regional, state, and metro level fiber backbone network infrastructure, central offices and associated real estate. In addition, Lumen is retaining and caring for its copper-based consumer services, which continue to provide a strong ongoing financial contribution to Lumen. The enterprise and wholesale fiber customers will remain with Lumen in all geographies. Lumen's management team will address the completed transaction during the company's FY25 earnings conference call on February 3.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy LUMN?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on LUMN
Wall Street analysts forecast LUMN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LUMN is 8.33 USD with a low forecast of 7.00 USD and a high forecast of 11.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
0 Buy
5 Hold
1 Sell
Hold
Current: 6.230
Low
7.00
Averages
8.33
High
11.00
Current: 6.230
Low
7.00
Averages
8.33
High
11.00
About LUMN
Lumen Technologies, Inc. is a networking company, which connects people, data, and applications quickly and securely. The Company is engaged in providing an array of integrated products and services to its domestic and global business customers and its domestic mass market customers. It operates through two segments: Business segment and Mass Markets segment. The Company conducts its operations under four brands: Lumen, which is its flagship brand for serving the enterprise and wholesale markets, including its Private Connectivity Fabric (PCF) network architecture, Lumen Digital products, and its priority services including Edge, Network-as-a-Service and cybersecurity; Quantum Fiber, which provides fiber-based broadband services to residential and small business customers; CenturyLink, which is engaged in providing primarily mass-marketed copper-based communications services, and Black Lotus Labs, which is its cyberthreat research and intelligence arm.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AT&T's Q4 Earnings Call Signals Optimistic Growth Ahead
- Fiber Broadband Investment Returns: AT&T's significant investment in fiber broadband, including a $5.8 billion acquisition of Lumen's fiber business, is expected to expand its coverage to over 40 million customer locations by year-end, a 25% increase from 32 million at the end of 2025, enhancing its competitive position in a saturated market.
- User Growth Potential: The anticipated addition of 8 million users will increase AT&T's broadband customer base from 10.6 million to 13.6 million, representing a 30% growth, providing a new revenue source and growth momentum amid a saturated wireless market.
- Earnings Outlook Improvement: The CFO indicated during the earnings call that adjusted EPS is expected to range between $2.25 and $2.35 in 2026, with a projected double-digit CAGR through 2028, instilling confidence in investors, especially in the current market environment.
- Enhanced Dividend Payment Capacity: With a payout ratio slightly above 50%, the upcoming profit improvements will bolster AT&T's ability to maintain dividend payments and may pave the way for the resumption of annual dividend increases that were suspended in 2022.
See More
AT&T's Fiber Business to Drive EPS Growth
- Fiber Expansion: AT&T plans to increase its fiber service coverage from 32 million to 40 million customer locations by the end of 2026, representing a 25% year-over-year growth that will significantly enhance its market share and competitive position.
- Customer Growth Potential: The addition of 8 million new users is expected to boost AT&T's fiber customer base from 10.6 million to 13.6 million, translating to a 30% increase that could generate nearly $3 billion in annual revenue, alleviating pressures from a saturated wireless market.
- Earnings Outlook Improvement: The CFO projects adjusted EPS to range between $2.25 and $2.35 in 2026, with a double-digit CAGR expected over the next three years, indicating growth potential even in a highly competitive market.
- Dividend Payment Capacity Enhancement: With improving profits, AT&T's dividend payout ratio is slightly above 50%, which may allow for the resumption of annual dividend increases that were suspended in 2022, attracting more income-focused investors.
See More
AT&T's Fiber Business Drives Profit Growth Potential
- Fiber Expansion: AT&T aims to increase its fiber service coverage from 32 million to 40 million customer locations by the end of 2026, representing a 25% year-over-year growth that significantly enhances its competitive position in a saturated market.
- Customer Growth Potential: The addition of 8 million new users is expected to boost broadband customers from 10.6 million to 13.6 million, a 30% increase that will further drive revenue, especially given the saturation in the wireless market.
- Revenue Expectations: With fiber customers averaging $73 per month, this could translate into nearly $3 billion in additional annual revenue, strengthening AT&T's profitability and ability to sustain dividend payments.
- Profitability Outlook: The CFO projects adjusted EPS to be in the range of $2.25 to $2.35 by 2026, with a double-digit CAGR expected over the next three years, indicating growth potential for the company in a highly saturated market.
See More
Lumen Technologies Shares Surge 29.2% After CEO Stock Purchase
- Stock Recovery: Lumen Technologies' shares surged 29.2% on Friday, marking a significant rebound from the sharp decline following Tuesday's earnings report, indicating renewed market confidence in the company's future prospects.
- CEO Stock Purchase: CEO Kate Johnson capitalized on the post-earnings sell-off by purchasing 78,685 shares at an average price of $6.35, totaling approximately $500,000, reflecting her confidence in the company's turnaround strategy.
- Financial Outlook: While the fourth-quarter adjusted earnings per share exceeded expectations, revenue only met them, with management projecting full-year free cash flow between $1.2 billion and $1.4 billion, including $300 million to $450 million in non-recurring tax refunds.
- Debt Management: Lumen successfully reduced its debt burden by selling its consumer-focused fiber-to-the-home business for $4.8 billion, bringing its debt-to-EBITDA ratio down to 3.8 times, although overall revenue and profit growth remains a critical focus.
See More
Health Insurance Stocks Slide, AI Stocks Surge
- Centene Guidance Miss: Centene's full-year revenue guidance of $186.5 billion to $190.5 billion fell short of the $194.1 billion consensus, leading to a 5% drop in shares, indicating pressure in the health insurance sector.
- AI Infrastructure Stocks Surge: Companies linked to AI infrastructure, such as Lumen Technologies and Applied Digital, saw stock prices rise by at least 20%, reflecting a recovery in investor confidence after a week of selling, potentially signaling a shift in market sentiment.
- Viasat Earnings Beat: Viasat reported adjusted earnings of $0.79 per share for the third quarter, up from $0.11 a year earlier, with shares gaining about 10%, as the company anticipates double-digit operating cash flow growth in 2026, showcasing a strong business outlook.
- Roblox Optimistic Forecast: Roblox expects full-year bookings between $8.28 billion and $8.55 billion, exceeding the $7.87 billion consensus, resulting in a 12% stock increase, indicating robust performance in the online gaming market and future growth potential.
See More
U.S. Stocks Rise as Dow Jones Gains Over 700 Points
- Dow Jones Performance: The Dow Jones index rose over 700 points on Friday, indicating a strong market rebound that reflects investor optimism about economic recovery, which could further drive consumer spending and investment.
- Strategic Shares Surge: Strategy shares jumped 14.1% to $122.56 on Friday, signaling a positive market outlook for the company and potentially attracting more investor interest in its future growth prospects.
- Overall Market Trend: The overall rise in U.S. stocks suggests a restoration of investor confidence, which may lead to increased capital inflows into the stock market, thereby promoting economic growth and corporate earnings.
- Market Data Source: This market update is provided by Benzinga APIs, highlighting improved market information transparency that aids investors in making more informed decisions.
See More
AT&T's Q4 Earnings Call Signals Optimistic Growth Ahead
- Fiber Broadband Investment Returns: AT&T's significant investment in fiber broadband, including a $5.8 billion acquisition of Lumen's fiber business, is expected to expand its coverage to over 40 million customer locations by year-end, a 25% increase from 32 million at the end of 2025, enhancing its competitive position in a saturated market.
- User Growth Potential: The anticipated addition of 8 million users will increase AT&T's broadband customer base from 10.6 million to 13.6 million, representing a 30% growth, providing a new revenue source and growth momentum amid a saturated wireless market.
- Earnings Outlook Improvement: The CFO indicated during the earnings call that adjusted EPS is expected to range between $2.25 and $2.35 in 2026, with a projected double-digit CAGR through 2028, instilling confidence in investors, especially in the current market environment.
- Enhanced Dividend Payment Capacity: With a payout ratio slightly above 50%, the upcoming profit improvements will bolster AT&T's ability to maintain dividend payments and may pave the way for the resumption of annual dividend increases that were suspended in 2022.
See More
AT&T's Fiber Business to Drive EPS Growth
- Fiber Expansion: AT&T plans to increase its fiber service coverage from 32 million to 40 million customer locations by the end of 2026, representing a 25% year-over-year growth that will significantly enhance its market share and competitive position.
- Customer Growth Potential: The addition of 8 million new users is expected to boost AT&T's fiber customer base from 10.6 million to 13.6 million, translating to a 30% increase that could generate nearly $3 billion in annual revenue, alleviating pressures from a saturated wireless market.
- Earnings Outlook Improvement: The CFO projects adjusted EPS to range between $2.25 and $2.35 in 2026, with a double-digit CAGR expected over the next three years, indicating growth potential even in a highly competitive market.
- Dividend Payment Capacity Enhancement: With improving profits, AT&T's dividend payout ratio is slightly above 50%, which may allow for the resumption of annual dividend increases that were suspended in 2022, attracting more income-focused investors.
See More
AT&T's Fiber Business Drives Profit Growth Potential
- Fiber Expansion: AT&T aims to increase its fiber service coverage from 32 million to 40 million customer locations by the end of 2026, representing a 25% year-over-year growth that significantly enhances its competitive position in a saturated market.
- Customer Growth Potential: The addition of 8 million new users is expected to boost broadband customers from 10.6 million to 13.6 million, a 30% increase that will further drive revenue, especially given the saturation in the wireless market.
- Revenue Expectations: With fiber customers averaging $73 per month, this could translate into nearly $3 billion in additional annual revenue, strengthening AT&T's profitability and ability to sustain dividend payments.
- Profitability Outlook: The CFO projects adjusted EPS to be in the range of $2.25 to $2.35 by 2026, with a double-digit CAGR expected over the next three years, indicating growth potential for the company in a highly saturated market.
See More
Lumen Technologies Shares Surge 29.2% After CEO Stock Purchase
- Stock Recovery: Lumen Technologies' shares surged 29.2% on Friday, marking a significant rebound from the sharp decline following Tuesday's earnings report, indicating renewed market confidence in the company's future prospects.
- CEO Stock Purchase: CEO Kate Johnson capitalized on the post-earnings sell-off by purchasing 78,685 shares at an average price of $6.35, totaling approximately $500,000, reflecting her confidence in the company's turnaround strategy.
- Financial Outlook: While the fourth-quarter adjusted earnings per share exceeded expectations, revenue only met them, with management projecting full-year free cash flow between $1.2 billion and $1.4 billion, including $300 million to $450 million in non-recurring tax refunds.
- Debt Management: Lumen successfully reduced its debt burden by selling its consumer-focused fiber-to-the-home business for $4.8 billion, bringing its debt-to-EBITDA ratio down to 3.8 times, although overall revenue and profit growth remains a critical focus.
See More
Health Insurance Stocks Slide, AI Stocks Surge
- Centene Guidance Miss: Centene's full-year revenue guidance of $186.5 billion to $190.5 billion fell short of the $194.1 billion consensus, leading to a 5% drop in shares, indicating pressure in the health insurance sector.
- AI Infrastructure Stocks Surge: Companies linked to AI infrastructure, such as Lumen Technologies and Applied Digital, saw stock prices rise by at least 20%, reflecting a recovery in investor confidence after a week of selling, potentially signaling a shift in market sentiment.
- Viasat Earnings Beat: Viasat reported adjusted earnings of $0.79 per share for the third quarter, up from $0.11 a year earlier, with shares gaining about 10%, as the company anticipates double-digit operating cash flow growth in 2026, showcasing a strong business outlook.
- Roblox Optimistic Forecast: Roblox expects full-year bookings between $8.28 billion and $8.55 billion, exceeding the $7.87 billion consensus, resulting in a 12% stock increase, indicating robust performance in the online gaming market and future growth potential.
See More
U.S. Stocks Rise as Dow Jones Gains Over 700 Points
- Dow Jones Performance: The Dow Jones index rose over 700 points on Friday, indicating a strong market rebound that reflects investor optimism about economic recovery, which could further drive consumer spending and investment.
- Strategic Shares Surge: Strategy shares jumped 14.1% to $122.56 on Friday, signaling a positive market outlook for the company and potentially attracting more investor interest in its future growth prospects.
- Overall Market Trend: The overall rise in U.S. stocks suggests a restoration of investor confidence, which may lead to increased capital inflows into the stock market, thereby promoting economic growth and corporate earnings.
- Market Data Source: This market update is provided by Benzinga APIs, highlighting improved market information transparency that aids investors in making more informed decisions.
See More
