We’re Cutting Our Lumen Fair Value Estimate in Half, but Think Bearishness Is Overdone

Following a terrible 2022, Lumen’s stock has been atrocious in 2023, with the company’s equity and debt trading like there’s danger of bankruptcy. We’ve taken a close look at Lumen’s financial position and believe the level of fear is too severe. Given the current environment, we have increased the cost of capital we assume for Lumen and have cut our long-term projections. Still, we arrive at a $5 fair value estimate, which is down from the $10 fair value we had previously, but remains more than double the stock’s current level.