Lumen Technologies Inc. shares plunged to their worst weekly performance in more than two decades and their lowest prices since Ronald Reagan was in office Friday, as the business that used to carry the name continued to struggle.
Lumen shares
LUMN,
-1.00%
finished the week off 24.7%, marking their worst weekly percentage decline since a stretch in April 2000, when they declined 27.4% as the dot-com boom fell off. The stock, which closed Friday at $3.96 and was known as CenturyLink for most of its life, is at its lowest level since Aug. 23, 1988.
See more: Lumen stock sinks to levels not seen since 1988 amid a ‘reset’
The company, under new management and in the midst of a transitional period, still counts CenturyLink as one of its major brands. The CenturyLink business is struggling for growth, along with other legacy revenue.
“Top-line pressures on legacy services, which drive >60% of Lumen’s revenues, are not likely to moderate in 2023 and … Lumen is no longer in a position to offset these pressures via cost reductions,” Goldman Sachs analyst Brett Feldman wrote following the company’s quarterly report this week.
While he sees “merit” to the turnaround plan outlined by Lumen’s new leadership team, he said that “several quarters of improved execution may be needed to provide visibility into stabilizing, and potentially growing, trends in revenue and Ebitda, which management believes the company can achieve in late 2024/2025.”
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In this week’s report, executives delivered a forecast for adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) Tuesday that fell well below the consensus view. Citi analyst Michael Rollins, who downgraded the stock to sell from neutral Wednesday, wrote that given “the absence of quantifiable data-points on the prospects to improve revenue, we do not have conviction that 2023 Ebitda is the trough.”
Lumen shares have suffered a tough recent stretch, falling 63% over the past 12 months as the S&P 500 index
SPX,
+0.22%
lost 9%.
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