onimate Lumen Technologies (NYSE:LUMN) is taking an outsized hit in Wednesday's down market, falling 10.3% as Wells Fargo cuts its rating to Equal Weight from Overweight, on some heavier dividend risks. Recent disclosures show that earnings before interest, taxes, depreciation and amortization at Lumen's "RemainCo" (what's left after divestitures of its ILEC and Latin American arms) are trending lower than expected, analyst Eric Luebchow says. That $10B in divestitures lead Luebchow to estimate that the RemainCo will be generating just $1.35B in quarterly run-rate EBITDA exiting this year, meaning he's cutting 2023 EBITDA forecasts to $5.3B, vs. the Street's near-$5.9B. And with capital expenditures likely in the $3.3B range next year, that suggests free cash flow will stay in the $800M range for coming years, vs. a dividend requirement of $1B-PLUS. Leverage limits have become the "biggest inhibitor" to capital allocation, Luebchow says, and net leverage will "drift" to the mid-4x range until EBITDA starts to stabilize and grow again - which could be in the 2024-2025 time frame, he says. Meanwhile, incoming CEO Kate Johnson and a new team may look to revisit the company's historical dividend, he notes. "We still believe the management team is heading in the right direction, with improving enterprise sales, a more favorable business mix with RemainCo and a focus on consumer fiber-to-the-home," Luebchow writes. "But with ~20% or more downside risk in the event of a 50% dividend cut, we see a negative short-term catalyst in the next 3-6 months." He's cut his price target on the stock to $8 from $12.50, now implying 11% upside after Wednesday morning's double-digit decline. Lumen (LUMN) on Monday closed the sale of its incumbent local exchange carrier business in 20 states to Brightspeed. More