Image source: Liberty Global.
What: Shares of Liberty Global LiLAC Group (LILA +0.49%), the Latin American and Caribbean arm of Liberty Global, slumped on Monday following an analyst downgrade. At 2:45 p.m. EDT, the stock was down about 10%.
So what: Analysts at Wunderlich lowered their price target on Liberty Global LiLAC to $43 per share, down from a previous target of $59 per share. Wunderlich continues to rate the stock a buy, and the new price target still represents a 47% premium over the stock price following Monday's slump.
Liberty Global recently reported its second-quarter results, with the LiLAC Group posting generally positive results. The group added 46,000 service subscriptions and 18,000 organic customers during the quarter, with the recent acquisition of Cable & Wireless Communications boosting revenue. Total revenue jumped 94% year over year thanks to the acquisition, with rebased revenue rising 1%.
Now what: Analyst upgrades and downgrades should never be the sole reason behind buying or selling a stock. In the case of Liberty Global LiLAC Group, a bullish analyst became slightly less bullish, making the steep drop in the stock following the news seem like an overreaction.
