Jefferies Downgrades VMED To Hold

Jefferies, citing foreseen risks, is downgrading its rating on Virgin Media VMED from Buy to Hold and is lowering its price target on the stock from $33.50 to $30. Says Jefferies, in its report, “Results last week reinforced the recent theme of VMED operating trends coming under pressure. The bull case envisages significant shareholder returns as operating leverage drives strong FCF growth. But buyback capacity could be materially reduced if OCF growth fails to rebound as much as consensus expects.” Jefferies additionally noted in the report that it prefers BT Group BT over VMED. VMED and BT closed at $25.28 and $32.38 yesterday, respectively.