NEW YORK (Reuters) - Shares of top phone companies AT&T Inc and Verizon Communications Inc fell on Monday after Bernstein Research downgraded their ratings and price targets.
Bernstein analyst Craig Moffett lowered his rating on AT&T shares to "market perform" from "outperform" and lowered the target price to $27 from $35. He cut VERIZON (VZ.NY)s rating to "underperform" from "market perform" and lowered the target to $27 from $32.
"AT&T and Verizon may indeed be somewhat more recession-resistant than most business. But we believe they are nevertheless much more cyclically exposed than consensus estimates (and valuations) would suggest," he said in a report.
AT&T shares fell 4 percent to $28.24, while Verizon shares fell 5.3 percent to $32.80.
Analysts have lately been reassessing the outlook for U.S. telecommunications carriers and their network equipment vendors.
While phone companies used to be considered recession-proof, consumers these days can easily disconnect landlines to go wireless or choose cheaper services. Carriers also require costly investment in new technologies, making them increasingly vulnerable to a downturn.
(Reporting by Ritsuko Ando; Editing by Steve Orlofsky)
