CS&L Shares Settle Near $28 After Early Bounce; Windstream Rallies 15% In Tuesday Session

Shares in Arkansas’ newest publicly traded entity Communications Sales & Leasing Inc., or CS&L, sprinted out of the gate on its first day of trading on Monday, vaulting to nearly $30 before settling below $28 as more than a million shares traded hands.

At the same time, former parent company Windstream’s shares jumped nearly 15% in today’s session after one Wall Street analyst set the Little Rock’s telecom year price target at $15 per share, well above its $10.61 closing price at the end of Monday’s trading day.

On Monday, Windstream shares closed the day nearly 13% off.

The up-and-down first day of trading for CS&L, which now trades under the stock symbol “CSAL” on the Nasdaq Stock Exchange, began as Citigroup initiated a buy rating on the Arkansas real estate investment trust (REIT) following its spin-off from Windstream on Friday.

Citigroup’s Michael Rollins launched coverage of the newly created Arkansas REIT with a “buy” rating and $32 target, setting off an early morning buying spree on Monday that pushed CS&L to $29.41 within the first few hours of trading.

However, it was Morgan Stanley analyst Simon Flannery who launched Wall Street’s coverage of CS&L with an equal-weight rating, while maintaining their underweight or “sell” rating on Windstream Holdings Inc. The Wall Street brokerage firm set CS&L’s price target at $28 per share, and $9.50 for Windstream.

Also, Montana brokerage firm D.A. Davidson upped its price target for Windstream from $8.50 to $11, noting the 1:6 reverse-split that will give shareholders an expected annual dividend yield of $2.40 per share in the newly-created CS&L stock.

However, it was Rollins’ bullish report that set off Tuesday’s rally for Windstream, noting in his analyst report that the Little Rock telecom unloaded more than $4 billion in debt with the spin-off of CS&L. The Citigroup analyst has a “buy” rating on the Little Rock telecom with a yearly target price of $15 per share, which would push up Windstream’s current value by more than 30% if met.

In Tuesday’s midday session, the newly minted Windstream shares jumped nearly 15% in midday trading, up $1.52 to $12.13. Of interest, CS&L shares continue to grow with nearly 2.1 million of volume in Tuesday’s noon session. The Little Rock REIT edged upward by three cents to $27.55.