Uniti Group Downgraded by Wells Fargo After Move to Cut Dividend
Wells Fargo downgraded Uniti Group stock to underperform after the Windstream spinoff cut its 2019 dividend payments to about $250 million from about $435 million in 2018. Windstream's court loss in a bondholder dispute and subsequent bankruptcy filing (see 1902250058)…
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"introduced a great degree of uncertainty into [Uniti's] story. Too much uncertainty for us," wrote Jennifer Fritzsche Monday. The analyst said it's unclear if Windstream's annual $650 million lease payments to Uniti must be renegotiated. "While we continue to believe UNIT’s fiber assets (separate from WIN) are attractive, the company’s path toward diversifying away from its WIN exposure (68% of UNIT’s revenue and ~80% of its EBITDA), has become more difficult to model." Uniti didn't comment Tuesday.