Nomura Securities on Telecommunications: Adjusting Estimates on T, VZ & S
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Price: $37.35 -0.24%
Rating Summary:
5 Buy, 26 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 36 | New: 12
Rating Summary:
5 Buy, 26 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 36 | New: 12
Trade T Now!
Nomura Securities on Telecommunications: Lookin' Good...For Now
Analyst, Mike McCormack, said, "We expect AT&T (NYSE: T) and Verizon (NYSE: VZ) to post results that will continue to support bullish sentiment. A positive industry backdrop continues to emerge, and we do not see significant risk to the thesis until the next iPhone (Nasdaq: AAPL) refresh. AT&T will likely continue to exhibit margin progression in the wake of the iPhone refresh in 4Q11. We expect wireless service margins to move 180bps higher Y/Y to 42.9%, with ARPU growth of 1.8% Y/Y. Verizon once again looks set to post the best postpaid subscriber and margin results. We now expect 765k net postpaid adds, and 47.7% wireless service margins. We have raised our 2012 EBITDA estimate for Sprint to $4.1bn in expectation of lower Network Vision spending. We see further upside potential to Sprint (NYSE: S) shares.
AT&T (NYSE: T) (Buy $36): 2Q12E EPS from $0.64 to $0.63 vs. Street $0.63; F12E EPS from $2.43 to $2.41 vs. Street $2.38.
Verizon (NYSE: VZ) (Neutral $42): 2Q12E EPS from $0.65 to $0.64 vs. Street $0.64.
Sprint (NYSE: S) (Neutral $2.50): 2Q12E EPS from ($0.41) to ($0.36) vs. Street ($0.40); F12E EPS from ($1.58) to ($1.54) vs. Street ($1.58)
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Analyst, Mike McCormack, said, "We expect AT&T (NYSE: T) and Verizon (NYSE: VZ) to post results that will continue to support bullish sentiment. A positive industry backdrop continues to emerge, and we do not see significant risk to the thesis until the next iPhone (Nasdaq: AAPL) refresh. AT&T will likely continue to exhibit margin progression in the wake of the iPhone refresh in 4Q11. We expect wireless service margins to move 180bps higher Y/Y to 42.9%, with ARPU growth of 1.8% Y/Y. Verizon once again looks set to post the best postpaid subscriber and margin results. We now expect 765k net postpaid adds, and 47.7% wireless service margins. We have raised our 2012 EBITDA estimate for Sprint to $4.1bn in expectation of lower Network Vision spending. We see further upside potential to Sprint (NYSE: S) shares.
AT&T (NYSE: T) (Buy $36): 2Q12E EPS from $0.64 to $0.63 vs. Street $0.63; F12E EPS from $2.43 to $2.41 vs. Street $2.38.
Verizon (NYSE: VZ) (Neutral $42): 2Q12E EPS from $0.65 to $0.64 vs. Street $0.64.
Sprint (NYSE: S) (Neutral $2.50): 2Q12E EPS from ($0.41) to ($0.36) vs. Street ($0.40); F12E EPS from ($1.58) to ($1.54) vs. Street ($1.58)
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