Shares of Verizon Communications Inc. VZ, +1.46% and AT&T Inc. T, +1.89% are up 1.9% in Wednesday trading after analysts at HSBC upgraded the stocks to buy from hold. Verizon’s stock is the biggest percentage gainer in the Dow Jones Industrial Average in Wednesday morning trading.
The analysts, led by Sunil Rajgopal, believe that Verizon, AT&T, and T-Mobile US Inc. TMUS, +0.88% are well positioned in internet, communications, entertainment, and e-commerce.
“We see Verizon as steadily enhancing its presence in the internet media space, which should not only help to grow its revenue base but also to improve its standing vs. the internet giants,” Rajgopal wrote.
He likes AT&T’s shareholder-return potential, though he dislikes its exposure to the pay-TV business. “T-Mobile appears well positioned to further improve its scale in mobile albeit at a slower pace than it has done historically,” Rajgopal wrote, though he already had a buy rating on the stock.
Verizon shares are down 1.9% over the past 12 months, while AT&T shares are down 14%, and T-Mobile shares are down 4.7%. The S&P 500 SPX, -0.29% is up 10% over the past year, while the Dow Jones Industrial Average DJIA, -0.04% is up 15%.
