Todd Rethmeier, an analyst at Hudson Square Research recently cut AT&T from a buy to a hold, citing the impact of the iPhone 5.
Longtime carrier bear Craig Moffett of Bernstein Research calculates AT&T's third quarter margins could fall by 360 basis points and Verizon's by 270 basis points as a result of the iPhone 5. However, Moffett does not espouse more optimism on Sprint, arguing it faces a similar sized margin drop.
For investors, taking a long-term view of the iPhone 5 launch may be trump any short-term earnings dent and the fears that in a worst-case scenario, declining carrier margins could show the cyclical nature of carrier earnings, poking holes in the argument that these stocks are safe, dividend-yielding investments.
Yin of Guggenheim Securities, though, goes beyond the iPhone 5 launch in forecasting difficulty for the carriers that lingers through future launch cycles. In fact, he views the carriers as being better positioned as a smart and recurrent trade rather than a "safe" long-term investment."
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