Coverage Initiation on Major U.S. Telecom Stocks

Investing.com — Bernstein analysts have initiated coverage on three major U.S. telecom stocks: AT&T Inc (NYSE:T), Verizon Communications (NYSE:VZ), and T-Mobile (NASDAQ:TMUS), with distinct ratings reflecting their competitive positions and growth prospects.

AT&T Inc

• Rating: Outperform
• Price Target: $28

Jefferies analysts noted that AT&T is successfully refocusing on its core telecom business after years of diversifying into non-core areas. Investments in fiber have strengthened AT&T's ability to grow its broadband market share and bundle wireless services. While its Business Wireline segment continues to decline, the impact on margins is easing as legacy services shrink. Bernstein believes AT&T’s stable core operations and attractive dividend yield make it a compelling investment.

T-Mobile

• Rating: Market Perform
• Price Target: $265

Over the past decade, T-Mobile has grown significantly, capturing substantial market share, particularly through its Fixed Wireless Access (FWA) services. Analysts project the company’s broadband market share will double in the next five years, and its strong use of mid-band spectrum from the Sprint merger positions it well in the 5G space.

Verizon Communications

• Rating: Market Perform
• Price Target: $48

Despite losing market share in recent years, Verizon’s FWA business has performed well, surpassing subscriber targets a year ahead of schedule. New management is focusing on improving postpaid net additions, but Verizon’s smaller fiber footprint compared to AT&T limits its broadband growth potential. While its valuation is reasonable, the company faces challenges in regaining competitive momentum.

Sector Insights

Bernstein highlighted the telecom sector’s steady growth, driven by wireless connections and broadband demand. With 5G investments peaking, companies are now prioritizing efficiencies and bundling strategies to remain competitive. Among the three, AT&T stands out for its return to core growth and attractive dividends.