Digex Down After Analysts Cut Ratings Following Meeting
Shares of
Digex
(DIGX)
were trading at a 52-week low today after analysts downgraded the stock following a meeting with the company on Friday.
Deutsche Banc Alex. Brown
cut Digex to buy from strong buy, but the firm maintained a 12-month price target of $78.
Legg Mason
also cut its rating on Digex to buy from strong buy.
Shares of Digex were recently trading at $25.56, down $3.44, or 11.9%. The 52-week high is $184, while the closing low is $27.25.
The Web hosting company, which is based in Beltsville, Md., offered an improved outlook for the fourth quarter at an analysts' meeting on Friday, but was unable to provide guidance for 2001 because it is still negotiating a reseller agreement with
WorldCom
TheStreet Recommends
( WCOM).
Analysts expect Digex to lose 70 cents a share in the fourth quarter, according to
First Call/Thomson Financial
. Wall Street also expects the company to lose $2.27 a share for the full year and $2.59 a share for fiscal 2001.
On
Friday, WorldCom received conditional approval from the
Justice Department
to acquire
Intermedia Communications
(ICIX)
, which controls Digex. WorldCom will obtain a 55% equity stake and a 94% voting stake in Digex.
