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Wells Fargo Initiates Cautious Coverage on US Wireless Carriers, Citing Starlink Threat
Summary
Wells Fargo has begun coverage of AT&T, Verizon, and T-Mobile with a cautious outlook, identifying SpaceX's Starlink satellite service as a growing competitive risk to the industry.
Wells Fargo has initiated coverage on the three largest U.S. wireless carriers with a cautious sector outlook, according to a new analyst report. The firm flagged SpaceX's Starlink as a significant and growing competitive threat to fixed wireless access and postpaid account growth for AT&T, Verizon, and T-Mobile.
The report, authored by analyst Steven Cahall, assigned an "Underweight" rating to AT&T with an $18 price target. Cahall noted that AT&T is the "least likely to strike a Starlink Mobile MVNO" (Mobile Virtual Network Operator) agreement, making it the most exposed to competition from the satellite internet provider. The firm estimates a 20% probability of AT&T forming such a partnership.
Verizon and T-Mobile were both initiated with an "Equal Weight" rating. Verizon, given a $43 price target, was named Wells Fargo's most preferred telecommunications company, with the analyst stating it has "the most to lose and the most to gain" from a potential MVNO deal with Starlink. Wells Fargo assigns a 40% probability to a Verizon-Starlink partnership. T-Mobile received a $170 price target, with the report suggesting its history of market share gains could be pressured by a more competitive Verizon and by Starlink reducing overall industry growth.
AdLooking at the broader industry, Wells Fargo anticipates that Starlink's expanding capacity, driven by future Starship V3 launches, will put pressure on fixed wireless access net additions for all major carriers by 2028.