An analyst downgraded Lumen Technologies (LUMN) to a "hold" rating. The downgrade stems from concerns over its significant debt load and increasing macroeconomic risks.
The analyst highlighted the company's $13.5 billion debt. This debt poses a major risk, particularly in a challenging environment for technology and AI-related stocks.
Management continues its turnaround efforts. Lumen also recently moved its stock listing to the Nasdaq. Despite these actions, the downgrade reflects skepticism about the company's ability to achieve its growth targets.
High leverage remains a key vulnerability. This is particularly true in a rising interest rate environment. It overshadows the firm's optically cheap valuation metrics.