3 Stocks J.P. Morgan Sees as Major Tax Reform Winners

Telecom stocks VZ and T have been strong over the past month

Dec 20, 2017 at 10:28 AM
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It looks all but certain that Congress is set to pass sweeping tax reform this week. According to J.P. Morgan Securities, the new tax rules will greatly benefit companies such as Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T), and Comcast Corporation (NASDAQ:CMCSA). Of course, this comes right after the companies scored what was considered a win with the Federal Communications Commission (FCC) recently repealing net neutrality rules. Considering this backdrop, it's not surprising shares of VZ, T, and CMCSA have managed to push higher in recent months.

Verizon Stock Nears Overbought Territory

Verizon stock has been rallying fast since its Nov. 15 bottom of $43.97, last seen trading at $53.17 -- a jump of 20.9%. In fact, the shares earlier touched their highest point since early January, and are approaching overbought territory, as their 14-day Relative Strength Index (RSI) settled at 68 last night.

Most other analysts have been slow to embrace the Dow component, though. Of the 22 brokerage firms in coverage, 14 still maintain "hold" recommendations. Moreover, Verizon has eclipsed its average 12-month price target of $51.61. Considering this, the security could be in store for upgrades and/or price-target hikes, if tailwinds are in fact on the way.

AT&T Can't Overcome Technical Resistance

Shares of AT&T have also bounced nicely since their November low of $32.55, last seen trading at $38.36. But the stock has still struggled to overcome a trendline connecting lower highs since the start of the year, with the 200-day moving average thwarting a number of breakout attempts, as well.

As such, it's not as surprising that analysts are bearish on the telecom concern. Just seven of 20 analysts covering the stock say it's worth buying, and the consensus 12-month price target is just overhead at $39.53.

Analysts Bullish On Comcast Stock

On the other hand, analysts love Comcast stock. Twenty-one of the 22 brokerage firms tracking the equity consider it a "buy" or "strong buy." Plus, the average 12-month price target of $44.87 represents a nearly 15% premium to current levels. Just this morning in fact, Deutsche Bank upped its price target to $45 from $44.

CMCSA was last seen trading at $39.22, putting it up roughly 13.6% for the year. The shares suffered a notable pullback in October through November, but this was contained nicely by the 80-week moving average.

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