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AT&T told Citi that lead within their network is a small percentage of the total infrastructure, according to a Monday note by the firm.
Ronald Martinez/Getty Images
AT&T
stock closed at a multidecade low on Friday—and it looks set to fall even further Monday after Citigroup lowered its rating, citing potential financial risk from the telecom industry’s historic use of lead-sheathed cables.
Analyst Michael Rollins downgraded AT&T (ticker: T) stock from Buy to Neutral/High Risk in a note on Monday. He lowered his target price for the stock to $16 from $22 earlier.
The stock was down 1.2% to trade at $14.32 on Monday. On Friday, AT&T shares fell 4% to $14.50, their lowest close since 1994.
AT&T,
Verizon
,
and other telecom giants own a large network of cables covered in toxic lead running across the U.S., according to an investigation by The Wall Street Journal published on July 9. The lead-covered cables can be found on the poles, soil, and water potentially risking the health of workers and communities around it, the article said.
“We are unable to specifically quantify financial risks (if anything material) for wireline Telcos from the concerns raised by WSJ articles,” said Citi’s Rollins. “We remain concerned for further near-term downside risk and view the uncertainty as an overhang for the time being.”
AT&T didn’t immediately respond to a request for comment from Barron’s. In response to WSJ, the company said it doesn’t believe its cables are a public-health hazard or a significant contributor to environmental lead considering other sources of…
..
