Verizon Communications Inc.’s stock is on track to log its best daily performance in more than three years as Wall Street starts to breathe easier regarding the potential implications to telecommunications companies from lead-clad cables.
Shares of Verizon
VZ,
are ahead 5.3% in midday trading Wednesday and on pace for their largest single-day percentage increase since March 26, 2020, according to Dow Jones Market Data.
The stock is also tracking toward its best two-day percentage increase since the period that ended July 27, 2017. Verizon shares are up 8% over the current two-session span. They rose 8.7% during the 2017 stretch.
Verizon shares had been under recent pressure after Wall Street Journal reporting highlighted the industry’s historical use of lead-sheathed cables, some of which are still buried underground or run underwater. Investors have been worried about the potential costs associated with removal of the cables or other remediation measures.
See more: Verizon’s stock slides to lowest level in more than 12 years amid longest losing streak since 2017
“We have not seen, nor have regulators identified, evidence that legacy lead-sheathed telecom cables are a leading cause of lead exposure or the cause of a public health issue,” a spokesperson for USTelecom, a trade group that counts Verizon as a member, said in a statement last week.
Read: Verizon’s lead ‘overhang’ may limit dividend increases, analyst says in downgrade
Shares of AT&T Inc.
T,
are rising as well on Wednesday, up 7.7% on the day and on track to record their first gain in 11 trading days. AT&T offered some relief to Wall Street late Tuesday when it offered an update on its own lead-cable footprint that suggested to analysts that potential removal costs wouldn’t be as steep as some initially feared.
Don’t miss: AT&T to pause prior plans to remove lead cables under Lake Tahoe as it works with regulators
AT&T estimates that lead-sheathed cables make up less than 10% of its copper-cable footprint and that “a very small portion” of those cables run underwater.
Oppenheimer’s Timothy Horan late Tuesday called Verizon “a more safe and attractive investment given lower lead exposure and wireline revenues” relative to AT&T.
Morgan Stanley’s Simon Flannery said in a Wednesday report that AT&T’s wireline footprint was three times the size of Verizon’s.
Deutsche Bank’s Bryan Kraft wrote Wednesday that “Verizon has greater exposure to the Northeast, which tends to be older on average than the rest of the U.S. in terms of age of the infrastructure, but Verizon has upgraded a higher percentage of its footprint than AT&T and probably has more aerial plant, which is more likely to have been upgraded since 1950.”
Read the full article here
