SpaceX, AI Weigh On Telecom Valuations, Scotiabank Says — Cuts Targets Across Major US Communication Names

• Scotiabank retained ‘Outperform’ ratings on Verizon and T-Mobile while cutting both price targets.
• AT&T and Comcast kept ‘Sector Perform’ ratings as the firm lowered their targets.
• SpaceX’s mobile push and AI agents have emerged as investor concerns across the telecom and cable sectors.

Scotiabank lowered its price targets for major U.S. communications stocks, saying valuations in the sector have faced meaningful pressure over the past year amid competition from SpaceX and increased discussion of artificial intelligence disruption.

According to TheFly, Scotiabank lowered its price targets on all four names while leaving ratings unchanged. Verizon’s target fell to $51.50 from $52.50 and T-Mobile’s to $217 from $232, with both retaining ‘Outperform’ ratings. 

AT&T’s target was cut to $27.50 from $29.25 and Comcast’s to $27.50 from $29, with both remaining at ‘Sector Perform’.

Carriers Team Up On Satellite Connectivity

Scotiabank’s target cuts came a day after Verizon, AT&T and T-Mobile formally launched a joint venture to expand direct-to-device satellite connectivity and reduce U.S. coverage gaps by pooling investment and limited spectrum resources across the three carriers. 

The carriers said their existing satellite partnerships will remain in place. According to Verizon, the JV will also develop common technical specifications, work with rural mobile operators and make it easier for additional satellite providers to integrate services, while existing carrier-satellite partnerships remain unchanged. 

SpaceX Mobile Ambitions Draw Scrutiny

SpaceX’s (SPCX) mobile push is also backed by a spectrum deal with EchoStar. EchoStar agreed to sell SpaceX its AWS-4 and H-block spectrum licenses for about $17 billion, intended to support Starlink’s next-generation Direct-to-Cell network.

Reuters reported in August that SpaceX’s broader mobile ambitions have unsettled the U.S. telecom market, though analysts also noted the challenge of matching nationwide networks built over decades by Verizon, AT&T and T-Mobile.

Analysts interviewed by Reuters, however, questioned how quickly SpaceX could replicate nationwide networks built over decades by incumbent carriers. AT&T CEO John Stankey pushed back, telling Axios that SpaceX’s strategy for challenging traditional mobile operators was “not a viable strategy.”

T-Mobile CEO Srini Gopalan questioned Starlink’s differentiation in an interview with the Financial Times. He said satellite connectivity remains complementary to terrestrial networks and noted that usage of T-Mobile’s Starlink-powered service had fallen short of the carrier’s initial expectations.

AI Agents Add Another Valuation Debate

Scotiabank also cited increased discussion around AI disruption but did not elaborate on the mechanism. Morgan Stanley also said in a recent note that AI agents capable of helping consumers find lower monthly bills had become a key investor concern across the cable and telecom sectors, per TheFly. 

The firm viewed wireless as better positioned than cable because of customer satisfaction and pricing structures.

What Retail Thinks About Communication Stocks

On Stocktwits, retail sentiment around T stock was ‘extremely bearish,’ while TMUS and VZ stock were both ‘bearish.’ Comcast (CMCSA) stood out from the group, with sentiment around the stock at ‘bullish.’

So far this year, Verizon shares have gained 13.64%, while T-Mobile is down 18.24%, AT&T has slipped 0.92%, and Comcast has fallen 21.81%. In comparison, the Invesco QQQ Trust, Series 1 (QQQ) has risen over 22% over the same period.

See Also: Dow Jumps 400 Points, Nasdaq Hits Record High After Jobs Report — BlackRock’s Rosenberg Calls Data ‘Dovish’

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