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Mobile communications has been a booming industry for decades, and Goldman Sachs analysts believe there is much more room for gains for investors in this sector. The investment firm recently upgraded its outlook on three of America’s largest telecommunications stocks. Keep reading to find out which stocks made Goldman’s hot list and why.
An analysis from Data Bridge Market Research predicts a compound annual growth rate (CAGR) of 2.80% for the mobile telecom sector through 2029. If these predictions are correct, the annual value of the mobile market will have exploded from $1.65 trillion in 2021 to an estimated $2.07 trillion. by 2029. These growth forecasts help explain why Goldman has given a buy rating to three top telecom stocks.
Check it out:
AT&T
AT&T is an established player in the telecommunications industry and has been making investors rich since the days of landline phones. They’ve used that position to grow significant market share in the mobile sector, and Goldman expects this share to continue to pay off. Goldman’s analysts predict improved earnings in the wireless sector and a possible stock buyback for AT&T.
Goldman was also convinced by AT&T management’s positive outlook during a recent conference call. They summarized their thoughts on AT&T this way: “We believe investors are bullish on the stock given solid commentary throughout the quarter with no apparent change in management’s tone. We think expectations are modestly high given the constructive wireless backdrop, offset by likely lower consumer expectations for broadband given the impact of the union strike.” That’s why AT&T was Goldman’s top buy pick.
Verizon
Next up is Verizon, another giant player in the mobile communications market. Goldman’s analysts believe Verizon will have a strong quarter thanks to improved wireless service and a corresponding increase in new subscriptions. They noted that there is room for improvement in some aspects of Verizon’s business, but overall, Goldman still thinks Verizon stock will be profitable for investors.
Goldman summarized its thoughts on Verizon by saying: “We think investors expect an in-line quarter and we expect Verizon to meet consensus estimates, although we think missing phone network additions through year-end would provide headwinds for the shares. ”
T-Mobile
Finally, there is T-Mobile, which Goldman has a “constructive” view on. Goldman explained its stance on T-Mobile: “We expect positive development versus the Street for postpaid phone network expansion in the third quarter, with a rebound heading into 2024.” Goldman also seems to believe that T-Mobile has opportunities for longer-term performance, while some investors may overlook this.
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Another way to invest in mobile and wireless communications
Goldman’s analysis is certainly worth considering, but some investors are simply uncomfortable with the stock market’s volatility. If you fall into that category but still want to invest in mobile and wireless communications, there is another way. Several real estate investment trusts (REITs), such as American Tower, operate satellite towers and communications infrastructures that enable mobile technology.
These REIT shares trade on public exchanges, but each share you purchase gives you proportionate ownership of the real estate assets in the REIT portfolio. REITs offer opportunities for stock appreciation and passive income through dividends. As the wireless industry grows, REITs like American Tower and Digital Realty Trust can give you the best of both worlds.
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This article Goldman Just Raised Its Outlook on These Popular Telecom Stocks originally appeared on Benzinga.com