NEW YORK (TheStreet) -- Shares of CenturyLink (CTL) - Get Report were falling on heavy trading volume late Friday morning as Raymond James lowered its rating on the stock to "market perform" from "outperform" with a $32 price target, the Fly reports.

The Wall Street Journal reported yesterday that the Monroe, LA-based communications company is in advanced talks to merge with Level 3 Communications (LVLT).

A deal could be announced in the coming few weeks, the Journal noted.

Following the news yesterday, CenturyLink stock jumped more than 14% and Raymond James said that it's now valued too high.

While the firm believes a deal with Level 3 would be a positive for CenturyLink, Raymond James said CenturyLink stock's risk/reward no longer warrants an "outperform" rating.

UBS said today that a deal between the two companies would yield more than $1 billion in synergies and would also generate free cash flow growth, according to the Fly.

The firm has a "buy" rating and $36 price target on CenturyLink shares.

By late Friday morning, over 5.43 million shares of CenturyLink had traded hands vs. the 30-day average of 5.10 million shares.

Level 3 stock was higher on heavy trading volume late Friday morning. More than 4.09 million Level 3 shares have traded so far today vs. the 30-day average of 3.47 million.

Separately, TheStreet Ratings objectively rated CenturyLink 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.

TheStreet Ratings rated this stock as a "hold" with a ratings score of C+.

The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

You can view the full analysis from the report here: CTL

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