HSBC is out downgrading U.S. telecoms in a general environment facing evolving business models and hot competition.
That particularly lands on more content-facing companies, the bank says: The “evolving content business model and increasing competition leads us to be more cautious on the pay-TV business and operators with greater exposure to content revenues.”
That evolving model includes the entry of well-funded rivals like Apple into content production with aggressive pricing and direct distribution, the bank notes.
It’s cutting ratings to Hold (from Buy) on AT&T (T -0.8%), Verizon (VZ -0.3%), T-Mobile (TMUS -1.3%) and Altice USA (ATUS -0.4%). Updated price targets vs. current price: $42 for AT&T (8% upside); $65 on Verizon (10% upside); $86 on T-Mobile (12% upside); $28 on Altice USA (5% upside).
Meanwhile, it’s maintaining a Buy rating on Comcast (CMCSA +0.1%).