What happened
Shares of Uniti Group (UNIT -1.26%) 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.
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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.
