Nomura Securities on U.S. Telecommunications - Looking at Q1 Large Caps
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Price: $47.06 +0.15%
Rating Summary:
17 Buy, 35 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 33 | Down: 45 | New: 4
Rating Summary:
17 Buy, 35 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 33 | Down: 45 | New: 4
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Nomura Securities on U.S. Telecommunications - Looking at Q1 Large Caps
Analyst, Mike McCormack, said, "Key themes out of 1Q12 results: 1) Subscriber trends favor larger carriers Verizon (NYSE: VZ) and ATT (NYSE: T) at the expense of smaller carriers; 2) We expect iPain to re-emerge with the next iPhone refresh cycle, where consensus ignores the impact at VZ and S, while punishing T in 3Q and 4Q; 3) The pricing environment has improved, and should get better for T and VZ; 4) Wireline still hibernating, we look for Verizon to benefit most. Maintain Buy on T given the bar for “mid-single digit (or better) earnings growth” appears to be very low. Neutral on VZ given above-peer growth and network superiority are already discounted. An investment in S discounts eventual positive FCF, a risky assumption."
"Sprint (NYSE: S): In our view, an investment in Sprint discounts eventual positive
free cash flow generation, an expectation that we find fraught with risk. The headwinds of iPhone (Nasdaq: AAPL) and Network Vision are likely to increase in 2012 and sustain through 2013, highlighting the risk to future cash generation. Using the company’s projections, investors are asked to look to 2017 for a sense of “normalized” Sprint economics. In our view, such an outlook is of low value."
Analyst, Mike McCormack, said, "Key themes out of 1Q12 results: 1) Subscriber trends favor larger carriers Verizon (NYSE: VZ) and ATT (NYSE: T) at the expense of smaller carriers; 2) We expect iPain to re-emerge with the next iPhone refresh cycle, where consensus ignores the impact at VZ and S, while punishing T in 3Q and 4Q; 3) The pricing environment has improved, and should get better for T and VZ; 4) Wireline still hibernating, we look for Verizon to benefit most. Maintain Buy on T given the bar for “mid-single digit (or better) earnings growth” appears to be very low. Neutral on VZ given above-peer growth and network superiority are already discounted. An investment in S discounts eventual positive FCF, a risky assumption."
"Sprint (NYSE: S): In our view, an investment in Sprint discounts eventual positive
free cash flow generation, an expectation that we find fraught with risk. The headwinds of iPhone (Nasdaq: AAPL) and Network Vision are likely to increase in 2012 and sustain through 2013, highlighting the risk to future cash generation. Using the company’s projections, investors are asked to look to 2017 for a sense of “normalized” Sprint economics. In our view, such an outlook is of low value."
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