Verizon Communications Inc. is in a “particularly difficult position” given current wireless-industry trends, and that dynamic has one analyst taking a more downbeat view on the shares. MoffettNathanson analyst Craig Moffett cut his rating on the telecommunications stock to underperform from market perform Thursday, writing that he continues to see “no easy answers” for Verizon
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given its position in the industry and evolving competitive trends in the wireless market.
Verizon shares are off nearly 3% in Thursday afternoon trading. As rival AT&T Inc.
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+0.49%
turned more promotional in recent years, Verizon has followed more a mixed strategy, according to Moffett. At times Verizon also amped up its offers, but it’s cut them back more recently. As Moffett put it, Verizon “seesawedbetween periods of promotionality and financial restraint, optimizing neither.” Aggressive industry-wide promotions can be a race to the bottom in the U.S. wireless market, and Moffett in the past has described Verizon as a sort of “elder statesman” that seemed to recognize the broader industry benefits of promotional restraint. But while Verizon historically was able to maintain higher pricing thanks to its strong network, T-Mobile US Inc.
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has the edge on quality in the current 5G era, and it also has lower prices. “In survey after survey, T-Mobile is pulling away, winning consistently not only for download and upload speeds, but for coverage and availability as well,” Moffett wrote. “Verizon’s customer base, self-selected for their ‘be …