Credit Suisse analyst Christopher Larsen downgraded his price targets for both AT&T and Verizon Communications, lowering his target for AT&T to $39 from $49, and Verizon to $40 from $52. He also downgraded the entire telecom sector. He cited both companies' moves this week toward flat-rate wireless plans as part of the reasoning, but also noted that overall, broadband adoption is slowing and many telecom companies are facing uncertain economic forecasts.
The slowing of broadband growth has become a major point of concern since the middle of last year. Some analysts now expect broadband subscribers for telco and cable TV companies to grow 20% less in 2008 than in 2007.
- Independent telco CenturyTel recently issued its own tempered outlook