Goldman Sachs Offers 'Charts To Watch' In The Telecom Sector

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Goldman Sachs' analysis of charts shows that telecom sector tends to outperform in years following presidential elections.

The charts illustrated that the sector’s hit rate of outperformance versus S&P 500 was above 75 percent.

Analyst Brett Feldman said wireless competition weighing on AT&T Inc. T and Verizon Communications Inc. VZ. Sprint Corp S pre-announced its quarterly results on October 18, highlighting a material beat to postpaid phone subscribers (347,000 versus Goldman Sachs' estimate of 200,000).

“The beat was another signal that the competitive environment is getting harder following T-Mobile US Inc TMUS’s strong pre-announcement on September 20, which implied that postpaid phone net adds were also running approximately 150k ahead of expectations,” Feldman wrote in a note.

Related Link: The Dinner Party That Led To The Merger Of AT&T And Time Warner

The implications of these beats were seen in Verizon’s recent third quarter announcement, which highlighted a decline in postpaid phone subscribers of 36,000, well below consensus of +239,000.

“With VZ pulling back 2.5 percent on 10/20 following its print (S&P 500 -0.1 percent), we may see some pressure on AT&T heading into its print on October 25 owing to concerns that its wireless results may show similar pressures,” Feldman noted.

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Posted In: Analyst ColorAnalyst RatingsMoversTechTrading IdeasBrett FeldmanGoldman Sachs
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