The firm also cut its price target to $55 from $58 on shares of the Broomfield, CO-based communications services company.
This comes after Level 3 agreed yesterday to be acquired by CenturyLink (CTL) for $34 billion in cash and stock, including the assumption of debt.
Jefferies said that it forecasts little regulatory risk for the deal, except for potential asset sales in the fiber segment which would be "immaterial" to the pro forma company.
The firm expects the transaction to close in the 2017 third quarter.
"We do not anticipate any alternate bidder and remain concerned about CenturyLink's fundamentals, which could reduce the stock portion of the deal," the firm added.
Separately, TheStreet Ratings objectively rated Level 3 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 "buy" with a ratings score of B-.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.