Lumen Technologies drops 20%, offering a strong buy with potential gains from cost cuts and digital growth.

Lumen Technologies' stock has fallen over 20% recently, presenting a buying opportunity due to its strong downside support and potential for significant upside. The company is reducing leverage below 4x, backed by a $13 billion backlog and aims to cut costs by about $1 billion annually by 2027. EBITDA is expected to improve starting late 2026, driven by digital transformation and monetization of its product and customer franchise, though these benefits may take time to fully develop. Trading at roughly 5.6 times EV/EBITDA, Lumen is near its valuation floor with potential for rerating as its growth initiatives gain recognition.