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Investing.com - JPMorgan has resumed coverage of Uniti Group (NASDAQ:UNIT) with a Neutral rating and a $7.00 price target. The stock, currently trading at $5.55, near its 52-week low, has seen its market capitalization settle at $1.32 billion.
The firm identifies Uniti as a leading telecommunications operator in Tier 2 and 3 markets, providing network services to residential and enterprise customers following its merger with Windstream earlier this year. The company maintains impressive gross profit margins of 84.86%, according to InvestingPro data.
JPMorgan notes the combined company will benefit from industry-wide secular drivers, including the fiber-to-the-home buildout and increasing opportunities with hyperscalers for long-haul and metro area high-capacity fiber routes amid the AI boom.
The research firm points out that the newly merged entity is currently undergoing a transformation to deploy fiber throughout its footprint to support future growth while removing legacy assets.
Despite promising secular growth trends, JPMorgan cites uncertainty regarding the timing of Uniti’s transition to higher-growth fiber-related services and concerns about the competitive environment in residential fiber-to-the-home and hyperscale fiber deals.
In other recent news, Uniti Group Inc. has been active in the financial markets with several significant announcements. The company launched a $250 million fiber securitization, secured by fiber network assets and related customer contracts across six southeastern states, with an anticipated repayment date in January 2031. Additionally, Uniti priced a substantial $1.4 billion offering in 7.50% Senior Secured Notes due 2033, upsizing the amount from the previously announced $900 million. This move is part of a broader strategy, as Uniti’s subsidiary, Windstream Services, LLC, also initiated a $900 million notes offering and is seeking up to $1.5 billion in incremental term loan borrowings.
Meanwhile, Kinetic, a fiber internet provider, has appointed David Oliveira as the new executive vice president and chief revenue officer, bringing over 20 years of industry experience. Kinetic also completed a fiber-optic network in Ruidoso, New Mexico, making high-speed internet available to approximately 8,000 homes and businesses. This development has earned Ruidoso the designation of a "Gig-Ready" community, with more than 75% of the town now having access to gigabit internet service. These recent developments highlight both Uniti’s and Kinetic’s ongoing efforts to expand and secure their financial and operational infrastructure.
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