What Makes Lumen (LUMN) a New Buy Stock

Core Viewpoint - Lumen (LUMN) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that could lead to increased stock prices [1][3]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, influencing their buying and selling decisions, which in turn affects stock prices [4]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with a strong track record of performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - The Zacks rating system maintains a balanced distribution of "buy" and "sell" ratings across its universe of over 4,000 stocks, ensuring that only the top 20% receive a "Strong Buy" or "Buy" rating [9][10]. Earnings Estimate Revisions for Lumen - For the fiscal year ending December 2025, Lumen is expected to earn -$0.57 per share, unchanged from the previous year, but analysts have raised their estimates by 9.5% over the past three months [8]. Implications of the Upgrade - The upgrade to Zacks Rank 2 positions Lumen in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].