Shares of Verizon (VZ) are under pressure on Monday after Citi analyst Michael Rollins downgraded the stock to Neutral as he believes rising long-term industry risks and the stock's current premium valuation are likely to limit returns over the next 12 months.
MOVING TO THE SIDELINES: In a research to investors, Citi’s Rollins downgraded Verizon to Neutral from Buy with an unchanged price target of $62. Rising long-term industry risks and the stock's current valuation premium are likely to limit returns over the next 12 months, the analyst contended. Rollins noted that he believes long-term risks are rising for industry pricing and margins given the "widening array of possible outcomes" for the proposed merger of T-Mobile (TMUS) and Sprint (S). National wireless companies that take more aggressive steps to shape their long-term strategic and competitive position in the industry have a better chance of creating value over the next 12-months, he added, reiterating Buy ratings on T-Mobile, AT&T (T), Telephone and Data (TDS) and U.S. Cellular (USM).
WHAT'S NOTABLE: Over the weekend, The New York Post's Josh Kosman reported that Google (GOOG) was in talks to help create a fourth U.S. wireless carrier, even as Sprint and T-Mobile struggle to get their controversial merger cleared with federal and state authorities. Alan Mulally, current Alphabet director, was said to have held discussions with Dish Network (DISH) about a plan to create a fourth U.S. telecom player, sources told the publication.
However, Google has since denied the report, telling CNBC that the claims were untrue. In a statement, a spokesperson for Google said that claims of Dish talks are "simply false" and that the company "is not having any conversations with Dish about creating a wireless network," according to 9to5Google's Abner Li.
PRICE ACTION: In morning trading, shares of Verizon are fractionally down to $58.14.
Verizon
-0.08 (-0.14%)
SentinelOne
-0.06 (-0.85%)
T-Mobile
-0.11 (-0.14%)
AT&T
-0.02 (-0.06%)
Telephone and Data
+0.05 (+0.16%)
U.S. Cellular
-0.08 (-0.17%)
Merged into SATS
+0.2 (+0.50%)
Alphabet
-17.48 (-1.54%)
Alphabet
-17.65 (-1.56%)