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

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. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). Sprint Corp (NYSE: 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 (NASDAQ: 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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