Verizon Downgraded, As J.P. Morgan Prefers AT&T | Fox Business

Verizon Communications Inc.'s stock dropped 1.6% in premarket trade Thursday, after a downgrade at J.P. Morgan, which cited a lack of significant near-term catalysts and the belief that rival AT&T now provides more upside potential for investors. Analyst Philip Cusick cut his rating on Verizon to neutral, after being at overweight since February 2014. At the same time, he upgraded AT&T to overweight, after being at neutral since December 2013, and raised his 12-month stock price target to $40 from $35. AT&T's stock gained 0.6% in premarket trade. "While the acquisition of AOL provides a significant advertising technology platform for Verizon, any substantial revenue impact could take a few years to materialize," Cusick wrote in a note to clients. "We do not see any significant near-term catalyst for the stock and at this point prefer AT&T to Verizon due to AT&T's dividend yield of 5.4% vs. Verizon's 4.5% and potential cost structure improvements." Verizon's $4.4 billion deal to buy AOL Inc. was announced on May 12. Verizon's shares have tacked on 4.9% year to date, while AT&T's have gained 4.3% and the Dow Jones Industrial Average has advanced 1.4%.