The Monroe, LA-based company provides an array of communications services to residential, business, governmental and wholesale customers.
The downgrade and lower price target follow an "unwarranted" 28% rise in the stock year-to-date, the firm said.
Shares were boosted by a strong fourth quarter and in-line guidance, however, market skittishness appears to be stabilizing, the firm noted. Jefferies expects the company to underperform in a more risk-on environment, particularly given secular challenges.
"We take a more cautious view on long term margins based on our cost analysis and bearish view on revenue stabilization. We believe the anticipated data center sale is likely to disappoint while the dividend payout could climb to levels once unacceptable to the company," the firm said in an analyst note.
Shares of CenturyLink are down by 0.84% to $31.90 in pre-market trading on Thursday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
This is driven by a few notable strengths, which should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks covered.
The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, expanding profit margins, notable return on equity and increase in net income.
The team believes its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: CTL