AT&T stock sank to lows it hasn’t seen since February 1993 as analysts tried to evaluate any financial liability for the telecom giant after The Wall Street Journal reported about potentially toxic lead covers on old cables. Shares of fellow telecoms Verizon Communications and Frontier were also under pressure.
• New Street Research said AT&T likely has the highest exposure overall to lead-cased copper cables, followed by Verizon and Lumen Technologies. It estimated that removing the lead could cost the industry nearly $60 billion, including potentially $34 billion for AT&T.
• The Journal reported that more than 2,000 cables covered in toxic lead run across the U.S., and that the lead-covered cables can be found on poles, in soil and water, leaching lead and posing potential health risks to the workers and communities around them.
• AT&T declined to comment. A spokesperson from USTelecom, responding on behalf of the telecom industry, said that many factors go into deciding if legacy lead-sheathed cables should be removed. The industry started phasing out lead-sheathed cables 73 years ago.
• Citigroup analyst Michael Rollins cut his rating on AT&T stock to Neutral from Buy. MoffettNathanson’s Craig Moffett kept his Neutral equivalent rating but said investors could steer clear of the stock for a while. JPMorgan also cut its rating to Neutral from Overweight.
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