Citizens shares jump after Credit Suisse upgrade

Shares of Citizens Communications Co. jumped Monday after an analyst upgraded the stock, saying it could be a buyout candidate and may benefit from the potential consolidation among rural local exchange carriers.

Credit Suisse analyst Christopher M. Larsen upgraded the company to "Outperform" from "Neutral" and said with the sector underperforming the broader market in the year to date, "Citizens is an attractive investment" at its current levels.

"There has been considerable pressure on the RLECs for over a year driven by greater cable competition and wireless substitution, which has resulted in accelerated access line losses," Larsen wrote in a note to investors. Wireless substitution refers to consumers replacing their land lines with wireless service.

While the carriers' business fundamentals have not changed, the weakness in the stocks "has made the yields more attractive and increased the likelihood of industry consolidation," the analyst added.

Shares of Stamford, Conn.-based Citizens rose 53 cents, or 4.8 percent, to $11.55. The stock is still down more than 7 percent since the start of the year.

Citizens plans to change its name to Frontier Communications Corp. on July 31.