Goldman Sachs Suggests Pairing Verizon and AT&T

Goldman Sachs is out with a research note this morning, where it suggests that traders buy calls on Verizon VZ and sell calls of AT&T T as their analyst sees significantly more upside potential in Verizon than AT&T. Goldman Sachs Telecom analyst Jason Armstrong sees 22% upside to VZ shares (Conviction List, Buy Rated) and just 4% upside to AT&T shares (Neutral rated) over the next 12-mths. He views VZ as better positioned for growth than AT&T given (a) LTE opportunity in 2011-2013 should create faster subscriber growth, and (b) superior margins. The analysts suggest buying the VZ October $36.00 call for $0.76 and selling the T October $30.00 call for $0.69. Verizon Communications Inc. is a holding company. Verizon through its subsidiaries is a provider of communications services. The company has two segments: Domestic Wireless and Wireline. AT&T Inc. is a holding company. The company is a provider of telecommunications services in the United States and worldwide. These include wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, managed networking, wholesale services and directory advertising and publishing.