Citi Has Buy On Convergys Corp

Citi Investment Research has a Buy rating and a $17 price target on shares of Convergys Corp CVG. In a note to clients, Citi writes, "Convergys announced that it will sell its holdings in the "cellular partnerships" located in the Cincinnati metropolitan area to AT&T for approximately $320 million in cash. Convergys has been a minority partner in this asset since its spin-off from Cincinnati Bell in 1998. Convergys expects the sale to generate net after-tax proceeds of approximately $250 million. The deal should close in early July-2011." Citi goes on to say, "We are not changing our estimates yet as the deal is not closed and CVG has not announced what its intention is for "use of cash". CVG may not have to change it guidance range, but the upper end of EPS (but not FCF) guidance could be more difficult now. It seems like a good deal for cash and balance-sheet focused investors. We're keeping our Buy rating on CVG." Shares of CVG lost 7 cents yesterday to close at $12.55, a loss of 0.55%.