12:20 PM EDT, 04/09/2024 (MT Newswires) -- Frontier Communications (FYBR) has the potential to outperform as the company expands its fiber footprint and explores additional growth opportunities, BofA Securities said in a note Tuesday.

Frontier is on track to expand its fiber network to 10 million homes by mid-2026. BofA estimates mid-single-digit EBITDA growth from the fiscal year 2024 through 2027, driven by subscriber growth, optimized pricing strategy and cost efficiency.

Frontier will unlock a capital source from its recently completed fiber-based asset-backed securitization facility that will help it fully fund business operations past 2025 with no near-term maturities. The company is also positioned to benefit from a $42 billion government program to expand its fiber base to underserved areas in the US.

"Frontier's long-term fiber plan presents an attractive combination of EBITDA growth and future upside cash generation potential," BofA said.

The investment firm initiated Frontier's coverage at buy and $30 price objective.

Price: 23.80, Change: +0.67, Percent Change: +2.90