Shulou(Shulou.com)11/24 Report--

On the morning of July 18, Beijing time, shares of AT&T fell nearly 7% to its lowest level in 30 years at the close of trading on Monday. Analysts downgraded the company's stock following news that the company had buried toxic lead cables across the United States.

Several telecom giants have abandoned a vast network of underground toxic cables, a large number of which may have contaminated nearby soil and drinking water sources, according to a report called AT&T and Verizon.

Analysts at Citigroup and JPMorgan Chase have downgraded AT&T shares in recent days. The company's shares have fallen more than 12 per cent since the release of the report and are down 1/4 so far this year. The stock hit a low of $13.68 on Monday, its lowest level since March 1993.

Citigroup analysts, led by Michael Rollins, said in an investor report that AT&T faced unquantifiable financial risks, which could create a "long-term risk backlog" for the company's shares, as the company may have significant risks in toxic lead cables, with its network covering about 40 per cent of households in the US.

Rollins downgraded AT&T to "neutral" from "buy" and lowered its target price to $16 from $22.

AT&T could not be reached for comment. American Telecom, a lobby group representing AT&T, Verizon and other telecoms companies, said companies had taken into account a number of factors in deciding whether the cables should be dismantled or buried, and there was no evidence that "legacy lead-sheathed telecommunications cables" were "the main cause of lead exposure or public health problems".

A spokesman for American Telecom said in a statement: "We have not seen it, nor have regulators found evidence that the left-over lead-sheathed telecommunications cables are the main cause of lead exposure. there is no evidence that they are the cause of public health problems."

JPMorgan analysts, led by Philip Cusick, downgraded AT&T to "neutral" from "overweight" on Friday, citing concerns about falling levels of the company's main wireless and fiber-optic growth businesses, a high-interest-rate environment and new uncertainty over lead-based cable problems.

"We have discussed copper and lead jackets with many industry contacts and have been unable to find a reasonable way to calculate any potential liability, but we believe that given AT&T 's large local trading operator business and AT&T 's initial long-distance network, AT&T 's exposure will increase," JPMorgan said.

AT&T 's forward price-to-earnings ratio is 5.95, below the industry's median of 8.78, according to Eikon.

Verizon shares also fell 5.5% to $32.14 on Monday, near a 13-year low. Verizon shares have fallen more than 10 per cent since the report.

"while this is a matter of concern, we don't think the telecommunications industry will bear substantial legal liability," Morningstar analyst Michael Hodel said on Friday. "

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