AT&T, Verizon Plummet To Multidecade Lows: Toxic Lead Investigation Sparks Telco Sell-Off, Analysts Head For The Exits
Portfolio Pulse from Piero Cingari
Shares of AT&T, Verizon, Telephone and Data Systems, and Frontier Communication dropped 7% to 15% following a Wall Street Journal investigation revealing neglect of a network of harmful lead-coated cables. Citigroup analyst Michael Rollins believes this issue will impact stocks and their valuation for a few months or longer. Citigroup has downgraded its ratings on AT&T, Telephone and Data Systems, and Frontier Communication to Neutral/High Risk and reduced their price targets.
July 17, 2023 | 8:30 pm
News sentiment analysis
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NEGATIVE IMPACT
The First Trust Morningstar Dividend Leaders Index Fund, which has an 8.3% weight in Verizon, may be impacted by the drop in Verizon's stock.
The drop in Verizon's stock, which makes up 8.3% of the ETF, is likely to negatively impact the ETF in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Frontier Communication's stock dropped due to a scandal involving lead-coated cables. Citigroup has downgraded its rating and reduced its price target.
The negative news about the lead-coated cables and the downgrade by Citigroup are likely to negatively impact Frontier Communication's stock in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The iShares U.S. Telecommunications ETF, which has a 4.2% weight in AT&T and a 12.4% weight in Verizon, may be impacted by the drop in these stocks.
The drop in AT&T and Verizon stocks, which make up a significant portion of the ETF, is likely to negatively impact the ETF in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60
NEGATIVE IMPACT
AT&T's stock dropped due to a scandal involving lead-coated cables. Citigroup has downgraded its rating and reduced its price target.
The negative news about the lead-coated cables and the downgrade by Citigroup are likely to negatively impact AT&T's stock in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Telephone and Data Systems' stock dropped due to a scandal involving lead-coated cables. Citigroup has downgraded its rating and reduced its price target.
The negative news about the lead-coated cables and the downgrade by Citigroup are likely to negatively impact Telephone and Data Systems' stock in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The iShares MSCI USA Value Factor ETF, which has a 5.1% weight in AT&T, may be impacted by the drop in AT&T's stock.
The drop in AT&T's stock, which makes up 5.1% of the ETF, is likely to negatively impact the ETF in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Verizon's stock dropped due to a scandal involving lead-coated cables.
The negative news about the lead-coated cables is likely to negatively impact Verizon's stock in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The SPDR S&P Telecom ETF, which has a 3% holding in Frontier Communication, may be impacted by the drop in Frontier Communication's stock.
The drop in Frontier Communication's stock, which makes up 3% of the ETF, is likely to negatively impact the ETF in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50