Telecom Stocks Set To Soar: Goldman Sachs Previews Verizon, AT&T, T-Mobile's Upcoming Earnings

The wireless telecom sector is heating up.

Solid results are expected to drive stock prices higher as positive market growth, competitive dynamics and pricing actions set the stage for a bullish performance from the major players: Verizon Communications Inc VZ, AT&T Inc T and T-Mobile US Inc TMUS.

Here’s a look at what Goldman Sachs' analyst James Schneider expects from these companies in the upcoming quarter.

Verizon Leads The Pack

• Top Pick for the Quarter: Verizon is Goldman's top pick for the upcoming quarter. Schneider expects Verizon to deliver solid results across multiple fronts, driven by improving wireless execution, continued momentum in fixed wireless access (FWA) and limited consumer broadband exposure.
• Key Metrics: Verizon's postpaid phone net adds are anticipated to show year-over-year improvement, while FWA continues to drive subscriber additions. Despite modest headwinds from consumer broadband, the overall outlook remains positive.
• Catalysts: Verizon could see an increase in the low end of its 2024 guidance, per Goldman Sachs. Positive commentary on pricing actions and wireless competition, along with steady net additions in FWA, could significantly boost investor interest.

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AT&T – Strong Wireless, Sluggish Broadband

• Positive Wireless Results: AT&T is expected to report positive wireless results with margin upside, though the broadband market remains sluggish. Goldman's estimates for AT&T are slightly above the Street for both the quarter and full year 2024.
• Key Metrics: AT&T's Mobility EBITDA is projected to grow by 6.6% year-over-year, outpacing the Street's estimate of 5.4%. However, weak consumer broadband market trends could pose modest risks.
• Catalysts: Commentary on fiber broadband execution and competitive intensity in the wireless market will be crucial. Positive remarks on free cash flow and wireless pricing trends are expected to outweigh any broadband-related concerns.

T-Mobile – Eyes on Capital Markets Day

• Guidance Uptick Expected: T-Mobile is set to raise the low end of its 2024 guidance, with favorable commentary on pricing actions and rational competition. Schneider notes that the market’s attention will soon shift to T-Mobile’s Capital Markets Day in the fall, where the company’s fiber broadband ambitions will be a key focus.
• Key Metrics: Estimates for T-Mobile align with Street expectations for the quarter, though projections for 2025/26 EBITDA are higher. Positive pricing comments throughout the quarter suggest potential upside in service revenue for the second half of 2024.
• Catalysts: T-Mobile’s Capital Markets Day will be crucial, with any announcements on fiber broadband investment being closely watched. Schneider warns that elevated organic investment in fiber could pose risks, given T-Mobile’s traditionally clean wireless story.

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