Why Lumen Technologies Stock Was Winning This Week

Network reliability is crucial for any telecom company; it nearly goes without saying. This is a major reason why investors were happy to snap up shares of Lumen Technologies (NYSE: LUMN) -- after the company detailed its preparations for emergency situations, its stock was trading up by more than 10% in price as of Thursday evening, according to data compiled by S&P Global Market Intelligence.

Ready for the worst

Lumen laid out those plans in a press release it published Monday morning. Across its rather sprawling enterprise network, the company said it is utilizing cutting-edge technologies like artificial intelligence (AI) and geospatial monitoring to keep customers connected in emergency situations.

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Disaster preparedness is a topic of particular concern these days, as the U.S. has been beset by a higher-than-usual set of disasters lately. In 2024, according to the National Centers for Environmental Information (NCEI), this country suffered 27 weather or climate disasters, which is exactly three times the annual average from 1980 to 2024. Each loss due to these topped $1 billion.

Lumen added that its preparedness efforts are augmented by partnerships with state and federal authorities, including the Federal Emergency Management Agency (FEMA).

Price target raised by analyst

Lumen stock also got a boost in the middle of the week when an analyst raised his price target on it. BNP Paribas's Sam McHugh upped his fair value assessment to $4 per share from the previous $3.51, although he left his neutral recommendation intact.

In his analysis, according to reports, McHugh said that the company is facing more "disconnects" from customers, but the pending $5.75 billion sale of its fiber business to giant peer AT&T will allow it to pay down some of its considerable indebtedness.

Lumen is a legacy landline telecom operation and has struggled for years to succeed in a world dominated by mobile. Eroding revenue and frequent bottom-line losses indicate this might not have been the best path to pursue. Personally, this stock isn't a buy for me.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.