AT&T has its act together in wireless, but that's already well understood by Wall Street, according to two analysts.
AT&T Inc. has its act together in wireless, but that’s already well understood by Wall Street, according to LightShed Partners analysts.
After refocusing its business on connectivity in the wake of ill-fated media ventures, AT&T T has seen success with its wireless initiatives, and that progress is reflected in the stock’s relative performance. As AT&T’s stock has outperformed Verizon Communications Inc.’s VZ over the past year, its dividend yield has fallen below Verizon’s — “as it should have,” LightShed Partners analysts Walter Piecyk and Joe Galone wrote.
The LightShed team expects AT&T to outperform T-Mobile US Inc. TMUS this year with its wireless-service revenue growth, but despite the company’s “commendable” relative performance, the analysts are no longer recommending AT&T’s stock. They downgraded it to neutral from buy Tuesday. “We assume a price increase by AT&T that has not been announced,” Piecyk and Galone wrote. “In addition, the rise of free line promotions could have a larger impact than we expect, particularly when pushed by cable operators that no longer report wireless EBITDA [earnings before interest, taxes, depreciation and amortization] losses.”
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