AT&T (T), Walt Disney (DIS), Comcast (CMCSA) and much smaller Altice USA (ATUS) are among the top telecom and media picks of Bank of America and JPMorgan for 2019. AT&T stock gained 3.5% to close at 29.54 on the stock market today, as the major indexes turned green on the first day of trading in 2019.
XBank of America included Disney and AT&T in its top 10 U.S. stock ideas heading into 2019. Other technology stocks in the brokerage's list included data center operator Equinix (EQIX) and chipmaker Marvell Technology Group (MRVL). Marvell in July acquired Cavium. JPMorgan put Altice USA, Comcast, AT&T and Zayo Holdings (ZAYO) among its top picks for 2019.
AT&T stock, the only one to make both lists, plunged 26% in 2018, including a December swoon. Though it bought Time Warner last year, AT&T stock lagged Dow component Verizon Communications (VZ) during 2018.
JPMorgan expects free cash flow growth to be a key theme in 2019 telecom stocks.
"We expect AT&T to generate $26 billion in free cash flow in 2019, which implies a 12.4% (free cash flow) yield and AT&T currently trades at a 7.2% dividend yield," JPMorgan analyst Philip Cusick said in a report to clients.
5G Wireless, M&A Among 2019 Telecom Stock Themes
Disney stock on Wednesday fell 0.6% to 108.97 while Comcast stock gained 0.9% to 34.37. Marvel stock rose 1.9% to 16.50.
"For 2019 we expect issues like 5G wireless rollouts, (internet video) adoption, wireless M&A, and cable's expansion in the wireless space to dominate headlines," Cusick said.
New York-based Altice is the fourth-biggest cable TV system operator behind Comcast, Charter Communications (CHTR) and privately held Cox Communications. Altice has backed off from an acquisition spree.
Akamai Stock Downgraded
Altice stock climbed 3.6% to 17.12 on Wednesday while Zayo stock slipped a fraction to 22.82.
Zayo has been viewed by some analysts as a takeover target. Bloomberg reported in November that a private equity consortium was in talks with the company.
In other analyst actions, Cowen & Co. on Wednesday downgraded Akamai Technologies (AKAM) to market perform. Akamai stock tumbled 6% in 2018, retreating from a 52-week high of 82.30 set on June 30.
"While strong e-commerce trends during the holiday season suggest to us that Akamai should have solid fourth-quarter results, the top-line setup going into 2019 feels more cautious," Cowen analyst Colby Synesael said in his note to clients.
Akamai stock fell 3.4% to 59.01.
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The post AT&T Stock, Marvell, Disney Among Top Tech Picks As Akamai Downgraded appeared first on Investor's Business Daily.
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