Bank of America downgrades Verizon, as it waits for '5G to be a thing'
Verizon (NYSE:VZ) shares fell on Thursday as investment firm Bank of America downgraded the telecom giant, noting that the fixation on 5G has not resulted in any major advancements just yet. 
Analyst David Barden lowered his rating on Verizon (VZ) shares to neutral and tweaked the price target to $51 from $64, noting that the company did well with 3G and 4G, as Apple (AAPL) iPhones and Google's (GOOG) (GOOGL) Android smartphones dominated the networks, but there is no dominant usage of 5G just yet.
"Verizon gambled again in the last several years that 5G would give birth to a similar degree of novel consumer and/or business demand," Barden wrote. "It has not."
Verizon (VZ) shares fell slightly more than 0.5% to $44.64 in premarket trading. 
The analyst added that it's "understandable" that Verizon (VZ) is fixated on 5G, but while there may be a "what is next" mindset, there is very little when it comes to "what is now."
Even with Verizon (VZ) raising prices, it lowered revenue guidance for Service and other revenue and Total wireless service revenue earlier this week, due to "elevated" promotional subsidies. And it's expected that subscriber weakness could carry into the third-quarter, as the company lost 138,000 postpaid phone subscribers in the second-quarter, whereas T-Mobile (TMUS) and AT&T (T) both added subscribers.
"What is clear now is that Verizon faces a conundrum similar to that which the cable industry faces today," Barden continued. "After 20 years of default dominance, the foundational premise of that dominance, network 'quality,' in truth may no longer matter."
The analyst admitted that Verizon (VZ) shares are "cheap," at just over 8 times earnings, but there are plenty of other "cheap" stocks and it's "unclear how Verizon stands out from the crowd in a crowded promotional period" going into the rest of the year.
On Wednesday, Verizon (VZ) said it would offer a Disney+ (DIS) subscription with prepaid unlimited plans. 
Analysts are exceptionally cautious on Verizon (VZ). It had an average rating of HOLD from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates VZ a HOLD.