November 24, 2000
Dow Jones Newswires
XO Commun Hits 52-Wk Low; Co. Plans
Tues Conference CallDow Jones Newswires
By Hollister H. Hovey
Of DOW JONES NEWSWIRES
NEW YORK -- It wasn't all kisses and hugs for XO Communications Inc.
(XOXO) Wednesday as the company's stock hit its 52-week low.
But, noted First Union Securities Inc. analyst Frank Murphy, "despite being
under pretty significant pressure, it's still trading at a relatively high multiple
compared to the rest of the group."
The entire competitive local exchange carrier group has been pummeled
recently.
While the company made no announcements Wednesday, investors may be
leery of a conference call set for Tuesday, during which the company plans to
discuss its European expansion plans.
"I would view that largely positively, though," Murphy said. "The European
local markets lag behind the U.S. This company has a proven management
team and a speed-to-market advantage in Europe. I don't expect to see any
meaningful surprises when they do announce next week."
Credit Suisse First Boston analyst Mark Kastan made very bullish comments
on the stock and the European expansion in a Wednesday research note. He
reiterated his strong-buy rating on the stock, citing management's upbeat
attitude going into the conference call.
He said investor concerns regarding the cost of the European roll-out look
overblown. He sees the roll-out contributing no more than $40 million to fiscal
year 2001's EBITDA losses, compared with the $100 million-plus anticipated
by many analysts.
But despite analysts' enthusiasm for the CLEC, some on Wall Street may be
concerned with the strength of its management team.
The company's chief financial officer, Mark Gunning, resigned last Monday,
and while his replacement, Wayne Rehberger, is considered highly qualified by
most, any executive shake-ups can stir investors in this volatile market.
"Anytime you have senior management turnover followed by the possibility of
a different business plan - which some investors may view this conference call
to be - investors get scared," Murphy said. "But I think it's mostly sector
weakness."
While the stock traded down to as low as $14.75 Wednesday, Kastan has a
$61 price target on the stock.
Wednesday's sell-off was the worst in over a year, knocking out the former
low set last Monday.
Shares of XO last traded down 16.2% to $15.56 on volume of 5.7 million
shares, compared with an average volume of 3.8 million.
-Hollister H. Hovey, Dow Jones Newswires; 201-938-2007;
hollister.hovey@dowjones.com
By Hollister H. Hovey
Of DOW JONES NEWSWIRES
(This repeats a story originally published late Wednesday.)
NEW YORK (Dow Jones)--It wasn't all kisses and hugs for XO
Communications Inc. (XOXO) Wednesday as the company's stock hit its
52-week low.
But, noted First Union Securities Inc. analyst Frank Murphy, "despite being
under pretty significant pressure, it's still trading at a relatively high multiple
compared to the rest of the group."
The entire competitive local exchange carrier group has been pummeled
recently.
While the company made no announcements Wednesday, investors may be
leery of a conference call set for Tuesday, during which the company plans to
discuss its European expansion plans.
"I would view that largely positively, though," Murphy said. "The European
local markets lag behind the U.S. This company has a proven management
team and a speed-to-market advantage in Europe. I don't expect to see any
meaningful surprises when they do announce next week."
Credit Suisse First Boston analyst Mark Kastan made very bullish comments
on the stock and the European expansion in a Wednesday research note. He
reiterated his strong-buy rating on the stock, citing management's upbeat
attitude going into the conference call.
He said investor concerns regarding the cost of the European roll-out look
overblown. He sees the roll-out contributing no more than $40 million to fiscal
year 2001's EBITDA losses, compared with the $100 million-plus anticipated
by many analysts.
But despite analysts' enthusiasm for the CLEC, some on Wall Street may be
concerned with the strength of its management team.
The company's chief financial officer, Mark Gunning, resigned last Monday,
and while his replacement, Wayne Rehberger, is considered highly qualified by
most, any executive shake-ups can stir investors in this volatile market.
"Anytime you have senior management turnover followed by the possibility of
a different business plan - which some investors may view this conference call
to be - investors get scared," Murphy said. "But I think it's mostly sector
weakness."
While the stock traded down to as low as $14.75 Wednesday, Kastan has a
$61 price target on the stock.
Wednesday's sell-off was the worst in over a year, knocking out the former
low set last Monday.
Shares of XO last traded down 16.2% to $15.56 on volume of 5.7 million
shares, compared with an average volume of 3.8 million. |
