Excerpts from today's Business Week article:
MORE CALLERS DIAL QWEST'S NUMBER
Stephen Dalton, head of First Capital Group, thinks he has spotted an up-and-coming prize in telecom gear and services, a fast-growing field. His pick: Qwest Communications International (QWST), the fourth-largest long-distance carrier serving retail and wholesale customers.
''It is dwarfed only by WorldCom,'' says Dalton,
Dalton says Qwest is well fixed to take advantage of changes in the industry, including growing demand for increased bandwidth capacity and Internet-related services.
Qwest is ''still little understood'' and deserves a higher valuation, says Dalton. He expects the stock will hit 60 in a year.
Certain analysts are also high on Qwest. Neither the merger of AT&T and British Telecom nor Bell Atlantic's purchase of GTE has dampened their enthusiasm. Those deals ''highlight the value of Qwest, with its state-of-the-art, U.S. long-haul network, and strong back office systems,'' says Blake Bath of Lehman Brothers.
Analyst William Vogel of NationsBanc Montgomery Securities says Qwest will ''continue to do well,'' partly because it's the only company with a network in place for ''data Internet Protocol connectivity.'' And it is likely, he adds, that Qwest will also ''enter into a partnership with a European communications company over the next few weeks.'' Qwest spokesman Steven Jacobsen says the company is aggressively evaluating its options in Europe.
BY GENE G. MARCIAL
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