Free Newsletter
AT&T, Verizon take stock hit after analyst slap
Free newsletter via e-mail
Tools
Phone companies AT&T and Verizon took it on the chin today after Stanford Bernstein Research analyst Craig "I love cable companies" Moffett downgraded the stocks. It would have been much more surprising if Mr. Moffett had upgraded them.
Around 1:30 PM, shares of AT&T had dropped by 4 percent, while Verizon was down 7 percent on the status change. Moffett moved AT&T to a "neutral" and Verizon to an "underperform" recommendation, and he issued his pronouncements by saying both companies had to deal with the economic downturn (Who doesn't? WalMart and McDonalds are the only companies that seem recession-proof) and a predicted slowdown in wireless and enterprise business.
Coming into today, AT&T and Verizon had gained nearly 5 percent and 10 percent respectively since October. Investors have loved the dividend yields of between 5 and 6 percent for both stocks, but Moffett feels that since the dollar is now uncertain to less favorable, those same investors will view "lack of geographic diversification" as a "headwind."
More careful readers should note that Moffitt is a long-time proponent of cable stocks and has no great-great love for the investments Verizon has made in FiOS. Cablevision's PR people have been quick to quote Moffitt, since he has been bullish on the company's stock. From a more historical perspective, this reporter is reminded of the authority Wall Street gave to Henry Blodget's pronouncements during the dot.com era.
For more:
- Wall Street Journal blogs on the stock slap.
- Some backstories on Cable Guy Moffitt. Article and Article.
Related articles
FiOS doesn't scare cable - FierceIPTV
Other analysts say telco Business connectivity still paying off
Comments
Posted by Anonymous | March 8, 2009 - 11:48am
AT&T is a terrible company to work for - it is poorly mis-managed ( non-producing managers) & has thousands of law suits against them ( just from past employees) . People need to start looking at their terrible customer service & inability to hire competent managers that actually know what "accountability" means. The corporate head qtrs in Hoffman Estates IL is a joke !!! - Anyone who thinks that being on hold for 45 minutes to speak to a customer service rep - that still doesn't fix the issue is "good customer service" This company is nothing but a monopoly that is headed up by "ELITE" overpaid and under qualified CEO'S that abuse their powers - people should be talking about this rather than investing in a company that does not care about their employees or their customers - It WILL catch up with them one day soon !!!
Posted by Doug Mohney | January 7, 2009 - 7:50pm
Cable companies are moving to 200 Mbps and faster speeds through DOCSIS 3.0 on the faster end and Clearwire will be able to compete with DSL speeds on the lower-speed end.
Verizon has invested in the future, rather than having to make a panic upgrade. The existing copper plant isn't getting any younger, regardless ... a fact AT&T will have to deal with increasingly more and more over the next decade.
Posted by Anonymous | January 7, 2009 - 12:21pm
The march towards FIOS is costing significantly. It is still not clear to me that phasing out copper plant without looking at some technologies that can add "virtual" bandwidth to the copper loop to the customer. Some of theses techniques can apparently use the copper plant in place and still carry bit rates in excess of 20mb/s, with video and hi speed internet. Seems as if some good technical work by Verizon and its tech folk were completely accepted by the decision makers with minimal consideration of the install and recovery financial issues of the F/O install plant. Mr. Moffet may be on to something, even if for the wrong reasons.
Comments (3) | Post a comment