Shares of Verizon Communications Inc. and AT&T Inc. were rising Tuesday and on track to snap losing streaks sustained in the wake of recent reporting about their legacy use of lead-sheathed cables.
Verizon’s stock
VZ,
was ahead 3.7% in Tuesday morning trading and on pace to snap an eight-session losing streak, the name’s longest since the period that ended Sept. 8, 2017. Verizon shares shed 16.1% over the latest eight-session losing streak.
AT&T shares
T,
meanwhile, were up 2.6% early in the session. The stock had been on a two-session losing streak but had failed to log a gain in nine sessions, factoring in one trading day of flat performance. AT&T’s stock was down 16.1% over that nine-session period.
See more: AT&T’s stock sinks to 30-year low as it nabs another downgrade
The wireless names have been under pressure after the Wall Street Journal reported on the companies’ historical use of lead-sheathed cables, some of which remain underground and in other places. Wall Street appears concerned about the potential cost of removal or other related measures.
“Many considerations go into determining whether legacy lead-sheathed telecom cables should be removed or should be left in place, including those regarding the safety of workers who must handle the cables, potential impacts on the environment, the age and composition of the cables, their geographic location, and customer needs as well as the needs of the business and infrastructure demands,” a spokesperson for USTelecom, a trade association that counts Verizon and AT&T as members, said in a Monday statement provided to MarketWatch.
Although analysts aren’t clear what costs, if any, the telecommunications players will have related to the legacy cables, several have weighed in to say the issue could prove an overhang on AT&T and Verizon shares until more information is available.
See more: Verizon’s lead ‘overhang’ may limit dividend increases, analyst says in downgrade
“We find it hard to see a clear or quick resolution and would not be surprised if the financial exposure for the [incumbent local exchange carriers] remained uncertain through much of 2024, if not longer, suggesting that this overhang will be tough to shake,” Evercore ISI’s Vijay Jayant wrote in a late Monday note to clients.
Shares of Telephone & Data Systems Inc.
TDS,
and Frontier Communications Parent Inc.
FYBR,
two smaller names that have sold off amid the concerns about lead-sheathed cables, were both rallying sharply Tuesday. TDS said in a late Monday release that it “conducted an assessment of its communications network across the country and located approximately 10 miles of lead-covered cables.”
The company “is identifying next steps to address the very limited amount of lead cabling it estimates is in its network,” it continued. TDS shares were ahead about 10% Tuesday.
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