T-Mobile, Verizon, and AT&T had a rough Wednesday
Despite a strong market rally, the U.S. "Big 3" had a tough day on Wall Street.
Big 3 carriers have rough Wednesday. | Image by PhoneArena
T-Mobile's shares were upgraded on Wednesday by MoffettNathanson, a leading equity research firm in the Technology, Media, and Telecom (TMT) space. Usually when a company is upgraded, the stock rises, and when a stock is upgraded on a day when the Dow Industrials soar 1,325.46 points or 2.85%, you would expect a huge upward move.
T-Mobile gets upgraded, but the stock fails to respond as you'd expect
However, it was not a good day for T-Mobile investors as the stock closed under $200 at $197.63, a 1.45% decline that took place during the regular trading session. After hours, the stock rose 23 cents (.12%) to close at $197.86.
We recently told you that T-Mobile insiders, those who must file with the Securities and Exchange Commission (SEC) with every buy or sell order they make for the shares, have been dumping their T-Mobile holdings by a significant margin. Most of these sales took place with the stock $20 to $30 higher.
T-Mobile gets a target of $254
MoffettNathanson’s upgrade of T-Mobile put a target of $254 on the stock, which would require the shares to rally by 28.4% from its extended-hours close on Wednesday. The equity research firm previously had a neutral rating on the stock but noted how the carrier is still growing its revenues and reporting record net new customer additions.
T-Mobile's failure to climb on the back of the big rally on Wall Street was not unique among the "Big 3" U.S. carriers. AT&T nearly declined as much as T-Mobile did on a percentage basis, falling 2.46%, or 69 cents, to $27.35. Verizon's shares dipped 58 cents or 1.19% on Wednesday to close at $48.04.
Why the "Big 3" carriers failed to participate in the rally
Analysts suggested that investors had swapped out of the wireless providers' shares, considered to be defensive (with lower volatility than the broad market) and moved into more risky stocks. Investors are also concerned about competition from satellite broadband providers like Starlink.
T-Mobile's Wednesday stock chart. | Image by Google
Starlink parent company SpaceX is on the verge of holding an Initial Public Offering (IPO) that could take place as soon as this June or July. SpaceX is looking to raise $40 billion to $80 billion and some of that cash could go toward building a satellite challenger to T-Mobile, Verizon, and AT&T.
Verizon gets a ratings cut
As we said, T-Mobile was upgraded on Wednesday morning, and it failed to get the stock moving higher. On the other hand, Verizon was downgraded by DBS Bank yesterday from Buy to Hold with a price target of $52, 8.2% higher than the current price.
Which stock would you buy?
The cut in Verizon's rating was made because the stock has already experienced a 19% gain during 2026. In addition, wireless revenue hit $20 billion during last year's Q4, the 18th consecutive quarter of growth for the carrier, and Verizon increased the quarterly dividend to $0.7075 per share, which puts its yield at a generous 5.89% level.
DBS Bank also is worried about T-Mobile's competitive effect on Verizon's business and its analysts are concerned that Verizon's $144 billion debt limits the carrier's financial flexibility.
Follow us on Google News
Popular stories
Latest News
Things that are NOT allowed:
To help keep our community safe and free from spam, we apply temporary limits to newly created accounts: