CS First Boston Downgrades Qwest to 'Hold'

Analyst Daniel Reingold says he's concerned about bond rating cuts, the ongoing SEC investigation and decelerating industry trends

CS First Boston downgraded Qwest Communications (Q ) to hold.

Analyst Daniel Reingold says the company's forecast is significantly below the prior guidance and he says he's surprised at the degree of deterioration, which he believes affects both local and long distance units at the company.

Reingold cut his $6.75 billion 2002 EBITDA estimate to $6.3 billion, and trimmed the $13 target to $7.50. He says the downgrade is driven by lower valuation plus his heightened concerns regarding possible breaches of the company's 4.0 times debt-to-EBITDA covenant; further bond rating cuts; decelerating long distance, local industry trends; the SEC investigation of revenue accounting; and disclosure issues.

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