AG Edwards Downgrades Qwest
AG Edwards downgrades Qwest Communications (Q ) to sell from hold.
Analyst Anthony Ferrugia says he is downgrading Qwest on price appreciation sparked by the prospective merger with MCI.
He notes it's difficult to precisely quantify what a deal may look like since valuations currently being driven by leaks and rumors.
But he adds, given Qwest's equity market cap of $6 billion with Qwest stock trading in the $3.30 range before November 2004, MCIP's equity market cap of $5.5 billion with MCI stock in the $17 trading range over same time period, he believes that even with generous synergy assumption, an all-stock deal by Qwest to buy MCI is more than priced into Qwest shares.