money Verizon stock downgraded to ‘underperform’ amid T-Mobile competition
Verizon shares are moving downward after MoffettNathanson cut its rating on the stock to 'underperform' amid increased competition from T-Mobile.
Video Transcript
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- Let's take a look at some calls today, starting with Verizon, which is down 2.7% after the phone company was cut to underperform at MoffettNathanson over-- by Craig Moffett. He said the downgrade was because of T-Mobile and AT&T's increasingly competitive advantage. Really interesting note here-- the price target is at $41. It was at 55 previously.
And, basically, Craig is talking about the dynamic in this industry, where there's been a lot of promotional activity, a lot of discounting. He doesn't love AT&T either, by the way. He says they've ended up with a low-quality customer base.
And Verizon's approach to promotions has been kind of all over the map, he says. Their efforts have been met with limited success in terms of trying to resist promotioning. They've seesawed, he says, between periods of promotionality and financial restraint, optimizing neither. And then he highlights T-Mobile, which has what he says is a widening competitive advantage in 5G.
- Well, you don't need me here. I guess that's great. That's awesome. No, but, look, this comes after we talked to AT&T's CFO on the day of earnings.
The stock really got hit. He told us that customers were delaying just how they were paying their bills. So that was a big red flag-- Verizon not a good quarter as well.
T-Mobile's still seen as the winner in this market. Now, what has yet to be determined is, what does the new Apple iPhone do to this industry? That is obviously gonna be a premium product.
Is it enough of a form factor change to-- that will drive better sales than the Street is looking for over at AT&T and Verizon? Unclear. But, again, this is another bearish note. And we've seen a couple of them on Verizon, and definitely on AT&T.
- You know, I just did a word search for "Apple" in this note. It's not in there. So that seems to me as he doesn't necessarily think it's gonna do any favors for Verizon-- by the way, Craig also cutting his price target on AT&T to $17, which is a little more than a buck below where it's trading right now.
