T Feb 2020 39.000 call

OPR - OPR Delayed Price. Currency in USD
-0.0400 (-26.67%)
As of 3:53PM EST. Market open.
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Previous Close0.1500
Expire Date2020-02-28
Day's Range0.0900 - 0.1400
Contract RangeN/A
Open Interest6.39k
  • TheStreet.com

    History of AT&T: Timeline and Facts

    From the start of the telephone, AT&T; has managed to remain a part of the landscape in America for over 100 years

  • Business Wire

    AT&T Inc. Announces Issuance of Series B and Series C Preferred Shares

    As described on the earnings call on January 29, 2020, AT&T (NYSE: T) ("AT&T") continues to add preferred equity to its capital structure, providing investors another alternative to invest in AT&T. AT&T announced today the issuance of €2,000,000,000 aggregate liquidation preference of its Fixed Rate Reset Perpetual Preferred Securities, Series B (20,000 shares, €100,000 liquidation preference per Preferred Security). AT&T also announced the issuance of $1,750,000,000 aggregate liquidation preference of its 4.750% Perpetual Preferred Stock, Series C (70,000,000 depositary shares, with a liquidation preference equivalent to $25.00 per depositary share). Proceeds from the issuances will be used for general corporate purposes.

  • Can Telecom ETFs Gain on Mixed Q4 Earnings Results?

    Can Telecom ETFs Gain on Mixed Q4 Earnings Results?

    We study the impact of a few big earnings releases in the telecommunications industry on ETFs with decent exposure to these companies.

  • HBO’s John Oliver has strong words for those who oppose ‘Medicare for All’

    HBO’s John Oliver has strong words for those who oppose ‘Medicare for All’

    Oliver, born in the U.K. but an American citizen, spent most of his return from break this weekend in support of Medicare-for-all, which has been a central platform for candidates Bernie Sanders and Elizabeth Warren.

  • MarketWatch

    Facebook cancels global marketing summit because of COVID-19 concerns

    Facebook Inc. is the latest tech company to pull the plug on an event because of COVID-19. "Our priority is the health and safety of our teams, so out of an abundance of caution, we cancelled our Global Marketing Summit due to evolving public health risks related to coronavirus," a Facebook spokesman said in an email to MarketWatch late Friday. The marketing summit was to take place next month in San Francisco. Previously, Facebook dropped out of Mobile World Congress, one of the largest and best-known telecommunications conferences in the world, for the same reason, leading to the show's cancellation. Among other companies to drop out of MWC out of health concerns were AT&T Inc. , Intel Corp. , Sony Corp. , and Amazon.com Inc. [s:AMZN]. Late Friday, International Business Machines Corp. said it was skipping the RSA security conference in San Francisco later this month because of COVID-19.

  • AT&T’s regional sports networks draw disappointing bids – and may not get sold, report says
    American City Business Journals

    AT&T’s regional sports networks draw disappointing bids – and may not get sold, report says

    Could AT&T’s regional sports networks not get sold off after all? The telecommunications and media company didn’t get what it wanted in an auction for its group of four sports channels covering markets around Seattle, Denver, Pittsburgh and Houston, according to a report in the New York Post, which cited sources. While AT&T Inc. (NYSE: T) received multiple bids for what are called “regional sports networks” or RSNs, all of them came in around or below $500 million, short of expectations estimated to be approximately $1 billion, the story said.

  • Huawei Scare Pushes Carriers to Tackle Dominance of 5G Suppliers

    Huawei Scare Pushes Carriers to Tackle Dominance of 5G Suppliers

    (Bloomberg) -- With the U.S. campaign against Huawei Technologies Co. threatening to disrupt the rollout of 5G wireless networks, phone carriers are joining forces to develop technology that can reduce their reliance on a handful of powerful equipment suppliers.The Chinese company dominates the European market for telecommunications gear, ahead of Ericsson AB of Sweden and Finland’s Nokia Oyj. Governments are weighing whether to follow the U.K. and limit Huawei’s share of 5G networks over concerns -- denied by the company -- that it represents a security risk.If they do, it could knock the progress of 5G off course: The big three have designed a lot of their wireless gear so it can’t easily be integrated in the same network, much like an electric toothbrush only works with its own brush heads. So building 5G with Nokia or Ericsson kit on top of Huawei 4G infrastructure is fraught with complexity and costs.Companies including Deutsche Telekom AG and Vodafone Group Plc have decided to combine separate projects to develop a more standardized, flexible network architecture that would make it easier for carriers to use products from multiple vendors, according to people familiar with the matter.Under the plans, the O-RAN industry alliance, backed by Deutsche Telekom and AT&T Inc. among others, will align its work with the Telecom Infra Project, which was started by Facebook Inc. and is supported by several phone companies, said the people, who asked not to be named as the plans aren’t yet public.The industry is pursuing the efforts with greater urgency partly because they’re alarmed by the prospect of restrictions on Huawei in more markets such as Germany, one of the people said. The U.K.’s decision to limit Huawei’s share of broadband infrastructure already led BT Group Plc to predict a 500 million-pound ($650 million) hit to its finances.The carriers were planning to announce the O-RAN/TIP initiative at the wireless industry’s biggest annual showcase in Barcelona next week, before it was canceled due to the coronavirus outbreak, the people said. An announcement could instead come as early as this week.O-RAN’s goal from the start has been to “invite in more players with new ideas to help make the network stronger and more secure,” said Deutsche Telekom spokeswoman Pia Habel. She declined further comment.A spokeswoman for TIP declined to comment. A representative for O-RAN could not immediately be reached for comment.Negotiating PowerEnsuring that antennas, switches and other gear from competing suppliers can communicate seamlessly may also make it harder for any vendor -- Ericsson and Nokia included -- to clinch contracts just because the customer already uses its equipment. That could strengthen the negotiating position of carriers in contracts for 5G networks that are set to cost the industry hundreds of billions of dollars.AT&T has said it wants to replace the proprietary software that Nokia, Ericsson and Huawei use to run their wireless network gear with an open software.Vodafone has begun issuing small contracts for OpenRAN, an initiative backed by TIP to standardize radio access network hardware and software. CEO Nick Read said in October that Vodafone was “ready to fast track it into Europe as we seek to actively expand our vendor ecosystem.”O-RAN began in 2018 as a lobbying and research effort to make the radio access network -- the largest part of a wireless system -- more transparent and inter-operable. TIP is a broader project involving hundreds of companies working across all elements of networks.O-RAN and TIP may already be changing the economics of the industry and giving newer players more room. It’s now possible to design a “virtual” wireless network, which uses standardized, open-source software in conjunction with hardware from different vendors.Rakuten Inc. is using such technology to roll out a virtual network in Japan. U.S. satellite broadcaster Dish Network Corp., a member of the O-RAN alliance, aims to build a 5G network along similar lines.Ericsson and Nokia, reluctant to pick a fight with their biggest customers, have publicly welcomed O-RAN and TIP. Ericsson has joined O-RAN, while Nokia supports TIP and has been helping Rakuten build the Japanese network.Nokia Chief Executive Officer Rajeev Suri said in April last year it’s “better to be involved than not,” although he didn’t expect the model to be replicated in other parts of the world.\--With assistance from Thomas Seal, Angelina Rascouet, Niclas Rolander and Scott Moritz.To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net;Rodrigo Orihuela in Madrid at rorihuela@bloomberg.net;Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.netTo contact the editors responsible for this story: Thomas Pfeiffer at tpfeiffer3@bloomberg.net, Jennifer RyanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Facebook cancels San Francisco summit on coronavirus fears

    Facebook cancels San Francisco summit on coronavirus fears

    Facebook Inc said on Friday it had canceled its global marketing summit scheduled for next month in San Francisco due to coronavirus-related risks. "Out of an abundance of caution, we canceled our global marketing summit due to evolving public health risks related to coronavirus," a company spokesman said. Earlier this week, Mobile World Congress (MWC), the annual telecoms industry gathering in Barcelona, was canceled after a mass exodus by exhibitors on coronavirus fears.

  • A&T and AT&T embrace “a nice marriage” for workforce development
    American City Business Journals

    A&T and AT&T embrace “a nice marriage” for workforce development

    Greensboro's N.C. A&T; State University is the first HBCU to join an effort whereby telecom behemoth AT&T; incentivizes employees to pursue master's degrees.

  • AT&T’s cable channels getting less love ahead of the big HBO Max launch, research says
    American City Business Journals

    AT&T’s cable channels getting less love ahead of the big HBO Max launch, research says

    The number of streaming-commissioned titles jumped to more than 70 percent at the end of 2019, the research shows.

  • Dealmakers, Beware: A ‘52-Headed Monster’ Is Watching

    Dealmakers, Beware: A ‘52-Headed Monster’ Is Watching

    (Bloomberg Opinion) -- The anything-goes world of megamergers under President Donald Trump has encountered new resistance. More than a dozen U.S. states sued to stop T-Mobile US Inc.’s takeover of Sprint Corp. and failed when a judge ruled against them this week. But their unusual effort to step in as de facto antitrust regulators in the era of a lax Trump administration — and the fact that the case was seen as such a close call — is sure to unnerve other dealmakers who may be contemplating their own controversial mergers and acquisitions. The Department of Justice and the Federal Communications Commission are the main regulatory bodies that deal-hungry telecommunications CEOs must appease to get their transactions over the antitrust hurdle. (Other industries may have to answer to the Federal Trade Commission.) But the states have emerged as one more powerful group to worry about. In the T-Mobile-Sprint matter, state attorneys general from around the country, led by New York and California, demonstrated a willingness to go beyond the convention of securing one-off concessions for their own constituents when a deal raises concerns. Instead, if regulators drop the ball, the states are prepared to team up and take companies to court, with proceedings that could potentially stretch on for months — and time is money. With the DOJ, FCC and now the states, it’s become “a three-headed monster,” said John Stephens, AT&T Inc.’s chief financial officer. “Or maybe a 52-headed monster, I should say,” he added, speaking during a post-earnings phone interview on Jan. 29, before the Sprint ruling.District Judge Victor Marrero ultimately ruled in favor of the wireless carriers this week, rejecting the states’ arguments that the merger will lead to higher prices for consumers and that wireless newbie Dish Network Corp. won’t become a viable competitor capable of replacing Sprint. The deal, which the companies expect to close by April, will shrink the number of U.S. national wireless carriers from four to three, a level of market concentration that was taboo under previous administrations.On the one hand, the ruling has the potential to open the floodgates for other megamergers that traditionally would have been considered off-limits. To use a hypohetical, take Dish and AT&T’s DirecTV: They compete in providing satellite-TV service to U.S. households, and both parties have said in the past that there would, in theory, be benefits to putting the businesses together, if not for the regulatory hurdles. (AT&T executives have since said they aren’t planning to sell DirecTV.) But just as T-Mobile and Sprint successfully argued that their industry is different now thanks to changing technologies, satellite providers could make that claim, too. Even so, the states’ persistence in the Sprint matter may make some would-be dealmakers think twice about how far they’re willing to go to get a transaction across the finish line. Keeping with the Dish-DirecTV example, those are precisely the kinds of well-known brands that the states could go after in a merger fight. And if it weren’t for the states, T-Mobile and Sprint would have had the major regulatory approvals they needed wrapped up months ago; FCC Chairman Ajit Pai gave his blessing back in May, and the Justice Department cleared the deal in July. As the battle with the states dragged on, Sprint’s market value shrank, its business deteriorated, and now T-Mobile wants to renegotiate the price it pays Sprint’s shareholders. In a bit of irony, the Federal Trade Commission said Tuesday that it’s looking into whether past purchases by U.S. technology giants such as Amazon.com Inc., Google and Facebook Inc. that slipped by regulators’ radars were, in fact, anticompetitive. The FTC’s announcement — part of the ongoing scrutiny of the power wielded by Big Tech — came hours after the ruling for T-Mobile’s acquisition of Sprint, one of the most anticompetitive megadeals in the tech sphere.Letitia James, the New York attorney general who led the T-Mobile-Sprint opposition, said in response to Tuesday’s court decision that while she disagrees with the outcome, the states “will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent.” Think she means it?To contact the author of this story: Tara Lachapelle at tlachapelle@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Need extra cash? Why this industry offers big bucks for biz referrals
    American City Business Journals

    Need extra cash? Why this industry offers big bucks for biz referrals

    Telecommunication companies operating across Orlando offer cash for client referrals, with one firm offering up to $25,000 per referral, as companies jockey for business clients in a competitive environment.

  • Sprint-T-Mobile Merger: Creating Long-Term Shareholder Value

    Sprint-T-Mobile Merger: Creating Long-Term Shareholder Value

    Sprint shares skyrocket on T-Mobile merger approval Continue reading...

  • T-Mobile Parent Deutsche Telekom Seeks New Terms for Sprint Deal

    T-Mobile Parent Deutsche Telekom Seeks New Terms for Sprint Deal

    (Bloomberg) -- Deutsche Telekom AG wants to renegotiate the terms for the sale of Sprint Corp. to its U.S. wireless unit T-Mobile US Inc., according to people familiar with the matter.The German carrier, the majority owner of T-Mobile, is seeking a lower price because Sprint’s shares have been trading below their level when the deal was proposed in 2018, said the people, who asked not to be identified as the deliberations are private.Getting one of the biggest U.S. wireless mergers ever over the finish line would be a boon to both companies. For Deutsche Telekom, the deal reduces its reliance on Europe, where carriers are struggling to grow amid fierce competition. For the chairman of Sprint owner SoftBank Group Corp., Masayoshi Son, it allows him to better focus on his technology investments and the $100 billion Vision Fund. The renegotiation talks are expected to start soon, the people said. They would follow a victory for the companies in a U.S. court this week, when a federal judge rejected a state lawsuit against the tie-up. Now the deal is in the home stretch, with only minor approvals left to secure and final financial terms to be ironed out. SoftBank declined to comment. Deutsche Telekom didn’t immediately return a call seeking comment.Deutsche Telekom shares fell 1.4% in Frankfurt as of 12:58 p.m. on Thursday. What Bloomberg Intelligence Says:Deutsche Telekom has limited leverage to renegotiate the terms of its Sprint acquisition, we think, even as the valuation of the latter jumped to $75 billion from $60 billion in 2018 under the deal terms, despite worsening operational performance. The allure of consolidation, including the acquisition of an attractive spectrum portfolio, suggests only a modest potential improvement in stock-exchange ratio.\-- Erhan Gurses, BI telecoms analystClick here for the researchFrequency ConstraintsWhile Sprint’s standalone value has dropped, SoftBank also sees itself in a good position because T-Mobile needs Sprint’s wireless frequencies or would face capacity constraints within as little as two years, one of the people said.T-Mobile’s importance for Deutsche Telekom has grown steadily in recent years and it now accounts for about half of group sales, up from around a third in 2014. T-Mobile and Sprint haven’t renewed the merger agreement since it lapsed on Nov. 1, and there have been discussions regarding several issues that T-Mobile Chief Executive Officer John Legere described as “not hostile” that month on an investor call. T-Mobile has suggested there could be new terms.The combined company, which will operate under the T-Mobile name, will have a regular monthly subscriber base of about 80 million -- in the same league as AT&T Inc., which has 75 million subscribers, and Verizon Communications Inc., which has 114 million. T-Mobile will have more wireless frequencies than any other U.S. carrier, giving it an advantage as the industry transitions to the next generation of wireless technology, the much-faster 5G standard.Bloomberg News reported Wednesday that Sprint and SoftBank would likely have to accept a lower price than when the merger agreement was first forged in April 2018. Sprint’s monthly churn -- a closely watched measure of how many customers leave -- has risen to nearly 2%, which means roughly a quarter of its subscriber base is quitting the carrier each year.The German company is likely to leverage that to negotiate a lower price, but Sprint also has valuable radio frequency spectrum without which T-Mobile US will face serious bottlenecks, a person familiar with the matter told Bloomberg on Wednesday.The Financial Times previously reported that Deutsche Telekom is pushing to renegotiate terms of the deal, citing unidentified people familiar with the matter.(Updates with analyst comment in fifth paragraph)\--With assistance from Stefan Nicola.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Scott Moritz in New York at smoritz6@bloomberg.netTo contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Thomas Pfeiffer, Jennifer RyanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Benzinga

    Bezos Purchases Jack Warner's Former Beverly Hills House For $165M In Record Deal

    The Amazon.com Inc. (NASDAQ: AMZN) founder and CEO has purchased the Beverly Hills Warner Estate for $165 million from billionaire entertainment mogul David Geffen, the Wall Street Journal reported Wednesday. The iconic house was originally owned by Warner Bros co-founder Jack Warner and his family since the 1930s. Geffen had purchased the 9-acres-house from the estate's lawyers back in 1990 upon the death of Warner's wife, Ann Warner.

  • MarketWatch

    Mobile World Congress show canceled because of coronavirus fears

    Mobile World Congress, one of the largest and best-known smartphone conferences, has been canceled out of fears over the coronavirus. John Hoffman, chief executive of show organizer GSMA, said in an email that the outbreak has made it "impossible" to hold the event. Show organizers had begged the host city of Barcelona to pull the plug on the show later this month after at least a dozen tech companies dropped out of the show. AT&T Inc. , Intel Corp. , Nvidia Corp. , Facebook Inc. , Cisco Systems Inc. , Telefon AB L.M. Ericsson , LG Electronics Inc. [s:KR: 066570], Sony Corp. , and Amazon.com Inc. were among those who bowed out. "Due to the outbreak and continued concerns about novel coronavirus, Amazon will withdraw from exhibiting and participating in Mobile World Congress 2020," an Amazon spokesperson told MarketWatch on Monday.

  • Moody's

    AT&T Inc. -- Moody's assigns Ba1 rating to AT&T's preferred stock issuance

    Moody's Investors Service, ("Moody's") assigned a Ba1 rating to AT&T Inc.'s (AT&T) proposed Series C Perpetual Preferred Stock (preferred stock). AT&T intends to use the net proceeds for general corporate purposes, which Moody's believes may include the repurchase of its common stock under its ongoing share repurchase program.

  • What the T-Mobile-Sprint Merger Means for AT&T and Verizon? Analysts Weigh In

    What the T-Mobile-Sprint Merger Means for AT&T and Verizon? Analysts Weigh In

    T-Mobile (TMUS) and Sprint (S) won clearance to merge from a federal judge Tuesday, sending T-Mobile shares up 12%, and Sprint shares up 77.5% by close of trading yesterday.Rejecting arguments by a group of state attorneys general that allowing the companies to merge would encourage anticompetitive behavior, U.S. District Court Judge Victor Marrero demurred that to the contrary, T-Mobile's "maverick" ways have historically forced "the two largest players in its industry to make numerous pro-consumer changes" to compete with it. In the judge's view, allowing the merger will in fact help "to continue T-Mobile's undeniably successful business strategy for the foreseeable future."To that end, T-Mobile COO Mike Sievert promised to press ahead and try to complete his company's acquisition of Sprint by April 1. With the Department of Justice and Federal Communications Commission already having given the deal their blessing, this merger should finally happen -- two years after it was first announced.Or not.Not all analysts are convinced this story is over just yet. In a note released immediately after the judge's verdict, Nomura analyst Jeff Kvaal warned that "we expect the state AGs to appeal." RBC Capital analyst Jonathan Atkin noted that such an appeal, if filed, could delay closing of the merger by "an additional 4-5" months -- potentially delaying closure until September 2020.Delay or no delay, Kvaal believes T-Mobile/Sprint have the advantage at this point, and puts the likelihood of the merger closing eventually at about 80%. (And accordingly, Kvaal raised his price target on T-Mobile stock today to $102 per share, implying there's a further 8% upside to be gained.Even if he's wrong about that, though, Kvaal argues that if the merger is dashed on appeal, a "standalone" T-Mobile would still be worth $93 on its own. And that means that even after Tuesday's price rise, there's little downside in the stock. (And again, potentially 8% upside).Over the last three months, TMUS stock has received a whopping 8 Buy ratings and just 2 Hold ratings. As a result, the stock has a ‘Strong Buy’ analyst consensus rating. (See T-Mobile stock analysis on TipRanks)But what about T-Mobile's rivals AT&T (T) and Verizon (VZ)? Where does the judge's decision leave them?In the short term, Kvaal argues that disruption from T-Mobile's efforts to integrate its and Sprint's customers is likely to spike "churn" at the latter company, and predicts at least some Sprint customers will jump ship for AT&T or Verizon -- the more so as both these companies are expected to "exploit" the situation by offering promotional deals to entice customers away from T-Mobile. In the longer term, though, Kvaal sees a merged T-Mobile/Sprint as a strong rival to the telecom giants, boasting "more subscribers, more spectrum, a better network, and broader distribution."And Dish? Isn't T-Mobile supposed to give Dish access to its network as a condition of the DOJ and FCC signing off on this deal. Well, yes, it is, and Oppenheimer analyst Timothy Horan chimes in on this point to predict that Dish may partner with one or more cable companies to sell wireless service. Still, Kvaal isn't at all optimistic that Dish will be able to compete effectively in mobile. Neither, for that matter, is Atkin, who worries that Dish will have "to compete in a highly mature and competitive market fraught with execution risk and significant capital requirements."Heavily leveraged Dish may discover it's bitten off more than it can chew.To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

  • Reuters

    GRAPHIC-Tech titans' market heft could signal broader stocks worry

    Outsized stock price gains for Apple Inc and Microsoft Corp mean the two tech titans' shares have attained unusual status: a combined weight of 10% of the benchmark S&P 500 index. The S&P 500, which many use a proxy for the overall market, is a market-cap weighted index, meaning that large stocks carry more influence. The last time a year ended with two stocks amounting to at least one-tenth of the S&P 500 was 1982, according to data from Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, when IBM and AT&T amounted to about 10.9% of the index.

  • The Zacks Analyst Blog Highlights: T-Mobile, Sprint, Verizon, AT&T and Dish Network

    The Zacks Analyst Blog Highlights: T-Mobile, Sprint, Verizon, AT&T and Dish Network

    The Zacks Analyst Blog Highlights: T-Mobile, Sprint, Verizon, AT&T and Dish Network

  • T-Mobile-Sprint Merger Gets Federal Judge's Nod, Stocks Rally

    T-Mobile-Sprint Merger Gets Federal Judge's Nod, Stocks Rally

    T-Mobile (TMUS) and Sprint (S) advocate the idea that the merger would prepare the New T-Mobile to compete with arch-rivals and lead to lower prices for Americans with faster Internet speeds.

  • Reuters

    CORRECTED-Investors expect any T-Mobile/Sprint deal price haircut to be small

    T-Mobile US Inc may be limited in its ability to trim the price of its $40 billion acquisition of Sprint Corp after it overcame regulatory obstacles to completing the deal, investors and analysts said on Tuesday. Before it is completed, T-Mobile's German parent, Deutsche Telekom AG, plans to ask Sprint's majority owner, Japan's SoftBank Group, to agree to a lower price, arguing that Sprint's fortunes have deteriorated following their agreement two years ago, sources told Reuters on Monday. Sprint shares were trading at around $8.3 on Tuesday, a 14% discount to the $9.6 per share price that the all-stock deal with T-Mobile assigns Sprint.

  • TheStreet.com

    [video]T-Mobile-Sprint Could Have Very Different Impacts on U.S. Wireless vs. Broadband

    In the long run, the deal could be bad news for U.S. wireless pricing and competition, but good news for the U.S. broadband market.

  • T-Mobile and Sprint Deal Approval Shakes The 5G Space

    T-Mobile and Sprint Deal Approval Shakes The 5G Space

    I am confident that the synergies between Sprint and T-Mobile will be massive with T-Mobile's capable management team at the helm

  • Why Ericsson Stock Might Be the Best 5G Play

    Why Ericsson Stock Might Be the Best 5G Play

    When it comes to 5G opportunities, Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) seems almost forgotten. Bulls have pressed the 5G-based case for Qualcomm (NASDAQ:QCOM) for years now. Nokia (NYSE:NOK) has drawn the attention of value investors. China's Huawei has been the subject of media coverage and political uncertainty. Ericsson stock, in contrast, draws seemingly little notice.Source: Shutterstock Despite the lack of interest -- or perhaps because of it -- ERIC stock might have the most appealing case for 5G bulls. Valuation is reasonable. A multi-year turnaround offers scope for improvement and already has borne fruit. Early returns in the 5G race also suggest room for optimism.There are reasons for caution. Political pressure on Huawei hasn't been the catalyst for either Nokia or Ericsson that some hoped. Ericsson stock has been an awful multi-year investment. Shares have dropped 13% over the past decade, while the NASDAQ Composite has more than quadrupled. Somewhat incredibly, ERIC's performance actually is negative over the last quarter century (though, to be fair, investors would have generated positive returns including dividends).InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 U.S. Stocks to Buy on Coronavirus Weakness So this is a bit of a "this time is different" case, which always is risky. But it's certainly an intriguing "this time is different" case. The Ericsson TurnaroundOne pillar of the case for Ericsson stock is that the company qualitatively has plenty of room for improvement. By the company's own admission, Ericsson's culture turned toxic in the past. In December, the company agreed to over $1 billion in fines payable to the U.S. Department of Justice and the U.S. Securities and Exchange Commission. The DOJ noted that the company's conduct "involved high-level executives and spanned 17 years and at least five countries."Ericsson said months earlier, at its Investor Update, that its own investigations had uncovered additional ethical and legal breaches. And so the company is working aggressively to improve its culture and its compliance competencies.Those efforts go beyond simply avoiding criminal or dubious activity. Ericsson has simplified its operating structure and taken out roughly $1 billion in costs, while reinvesting some of those savings in much-needed research and development. It has exited lower-margin contracts.This simply looks like it should be a better company going forward. And the efforts already have helped the company's results. The Numbers ImproveEricsson's results have steadily improved of late. Gross margin dipped below 30% in the last three quarters of 2017. Excluding restructuring charges, the figure climbed to 37.5% for full-year 2019.That expansion helped drive a strong improvement in operating profit, which excluding one-time costs (including the U.S. fines) more than doubled last year. Ericsson sees more room for growth ahead, with the company targeting 12-14% margins in 2022 against an adjusted 9.7% in 2019.That expansion alone would drive earnings up at least 25% from current levels. Sales growth should continue as well. After 4% constant-currency organic growth in 2019, the midpoint of 2020 targets suggests an increase over 3% in reported sales.If 5G can accelerate that top-line growth, Ericsson's fundamentals can become attractive in a hurry. Excluding the U.S. fines, 2019 free cash flow neared $1.8 billion, or about 54 cents per share. Excluding $1 per share in net cash on the balance sheet, ERIC is trading at less than 15x free cash flow based on 2019 numbers. If margins expand and sales grow, that multiple either has to dip into the single-digits or, as would be more likely, ERIC stock has to rally. 5G and the Case for Ericsson StockTo be sure, that case rests on Ericsson taking solid share in 5G from Nokia and Huawei. The news there admittedly remains somewhat mixed.Despite U.S. pressure, Huawei still is driving sales in Western countries. For instance, German lawmakers have pushed to ban the Chinese supplier from their country's telecommunications network. Yet Huawei, along with Nokia, still scored a big win with Telefonica Deutschland (OTCMKTS:TELDF).Nokia remains a formidable competitor. At least some of what 5G deployments Ericsson has won have come through lower upfront pricing, as Bloomberg has reported. And the race for 5G wins is only in the early stages. It's possible the pressure on Huawei could be eased through a broader U.S.-China trade deal or a new presidential administration in 2021.Meanwhile, Nokia has a turnaround strategy of its own, and a reasonable valuation if its own targets are hit. (The fact that the company already has pulled down 2020 guidance, however, impacts that company's credibility.) Cisco Systems (NASDAQ:CSCO) has pulled back and has 5G exposure. Investors even could look to telecommunications providers AT&T (NYSE:T), Verizon Communications (NYSE:VZ), or even China Mobile (NYSE:CHL).Even out of the group, though, Ericsson stock has a sneakily attractive case. The giants in the space don't have the same turnaround benefits on the way. Nokia's credibility seems too damaged. It's Ericsson that might have the most attractive case in 5G, and if the company delivers on its promise, Ericsson won't seem undercovered for too much longer.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 U.S. Stocks to Buy on Coronavirus Weakness * 7 Strong Value Stocks to Buy for 2020 * Are All the Top 10 Warren Buffett Stocks Worth a Buy? The post Why Ericsson Stock Might Be the Best 5G Play appeared first on InvestorPlace.