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Why Uniti Group's Shares Fell as Much as 18% Today

By Anders Bylund - Updated Apr 25, 2019 at 9:16AM

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Another analyst voiced his doubts about Windstream's future, dragging its network-infrastructure partner down by association.

What happened

Shares of Uniti Group (UNIT -2.91%) fell as much as 17.9% on Thursday due to a bearish analyst note on the former Windstream Holdings (WINMQ) unit. By 3:30 p.m. EST, the telecommunications infrastructure manager had recovered somewhat to a 16.7% drop.

So what

Citigroup analyst Michael Rollins cut his price target on Uniti from $15 to $11 per share, based on a recent court decision finding some of Windstream's debts in default. Rollins also slashed Windstream's price target from $2.00 to $0.50 per share and tagged both stocks with a sell rating. For the record, Windstream's stock is trading 23% lower as the closing bell approaches.

Check out the latest Uniti earnings call transcript.

Businessman balancing precariously on a rope strung high above the city.

Image source: Getty Images.

Now what

Citi's analyst note didn't really add anything to the conversation around Windstream and Uniti, apart from some firm price targets and another bearish voice. I continue to expect Windstream to go bankrupt while Uniti struggles to free itself from that unfortunate relationship to serve a fresher and healthier customer portfolio.

As it stands, Uniti's management had expected to collect at least 50% of its sales in 2019 from clients not named Windstream, and that effort absolutely must become a top priority under these circumstances.

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Stocks Mentioned

Windstream Holdings, Inc. Stock Quote
Windstream Holdings, Inc.
WINMQ
Uniti Group Inc. Stock Quote
Uniti Group Inc.
UNIT
$9.68 (-2.91%) $0.29

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