Jefferies upgraded Earthlink (ELNK
) to buy from hold, citing a more than 20% decline since late February in the Internet service provider's stock price.
Analyst Youssef Squali thinks success in one or more of the company's four new initiatives (New Edge Networks, Muni-WiFi, Voice initiative with COVAD, and Helio) could reignite growth over the next 12 to 18 months. While it may be a bit early in predicting success for Earthlink's new initiatives, he thinks the downside risk in the stock is limited as the pullback has discounted these issues. He keeps a $12 stock price target.