Oppenheimer Very Positive on Wireless, Cloud and Tower Stocks for 2014

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The incredible demand for wireless capacity, broadband and cloud storage and accessibility continues to grow almost unabated in the United States. As the landline phone slowly goes the way of the typewriter, Americans continue to upgrade their wireless abilities, while continuing to search for the companies offering the best values.

In a new report, the analysts at Oppenheimer handicap the earnings season for their top stocks to buy in the space. They continue to expect that lower handset costs, higher average revenue per user driven by data usage, and an extension of the handset upgrade cycle will lead to better-than-expected wireless profitability. While the razor/razor blade aspect of the business continues to be a margin driver, technology gains and smartphone innovation remains important.

Here are the top wireless, cloud and tower stocks to buy at Oppenheimer.

American Tower Corp. (NYSE: AMT) has also been a momentum trader’s dream stock and is a top tower stock for 2014 at Oppenheimer. The company announced last summer that it would be buying 4,500 wireless sites in Brazil and Mexico from NII Holdings for $811 million. Shareholders are paid a 1.4% dividend. The Oppenheimer price target sits at $90. The Thomson/First Call estimate is $94.93. American Tower closed Friday at $83.15.

AT&T Inc. (NYSE: T) continues to aggressively market its U-verse video platform. The company also has announced an ultra-fast Internet service that will compete with the new Google Fiber offering. AT&T added 655,000 new subscribers this past quarter. Shareholders are paid an outstanding 5.5% dividend. Oppenheimer has a $42 price target for the stock. The consensus price target for the stock is posted at $36.96, and AT&T closed last Friday at $33.70.

Akamai Technologies Inc. (NASDAQ: AKAM) has been able to offer scalable benefits associated with offloading services from client infrastructures, allowing clients to have fewer hard assets in place while providing an ongoing revenue stream for Akamai. This translates into more than 125,000 servers operating dedicated, hybrid cloud and true cloud servers to provide IT and, increasingly, security services in a vast array of companies across a widely diversified group of industries. With an impressive client list that grows each quarter, the company is firing on all cylinders. The Oppenheimer price target is set at $60 and the consensus is $53.44. Akamai closed Friday at $48.58.

Comcast Corp. (NASDAQ: CMCSA) is the top consumer cable and entertainment name for 2014 at Oppenheimer. The largest cable company in the United States continued its push to be a top entertainment name. The Oppenheimer analysts think 2014 will be another banner year for entertainment stocks with continued strong pricing power, advertising spending growth and new digital platforms. Comcast shareholders are paid a 1.5% dividend. The Oppenheimer price target is $52. The consensus target is $55.87. Comcast closed Friday at $53.54.

Crown Castle International Corp. (NYSE: CCI) bought the rights to AT&T’s wireless broadcast towers back in the fall for $4.85 billion. When wireless service providers sell broadcast towers, they typically lease back space from tower operators so they can continue to offer their services without interruption. This is a win-win for the purchaser. The Oppenheimer price target for the stock is set at $90. The consensus price target for the stock is at $87.58. Crown Castle closed Friday at $74.22.

T-Mobile US Inc. (NYSE: TMUS) may be a surprise name to land on the Oppenheimer list. Wall Street rumors are starting to fly that in a reversal of fortune, T-Mobile may end up acquiring Sprint instead of the other way around. The Wall Street Journal reported that CEO John Legere recently suggested that if any purchase should occur, T-Mobile should prevail. If Sprint and T-Mobile were to combine, the merged company would remain the third-largest carrier in the United States, with nearly 53 million postpaid users, the most lucrative consumer segment. The Oppenheimer price target for the stock is $35, and the consensus number is set at $31.46. The stock closed Friday at $32.51.

Verizon Communications Inc. (NYSE: VZ) added 173,000 FIOS video subscribers in the third quarter, and analysts on Wall Street are positive on fourth-quarter numbers as well. Many came at the expense of the cable companies. The company has also expanded its 4G LTE offering, which it trumpets in current television advertising. Investors are paid a solid 4.4% dividend. Oppenheimer has a $56 price target on the stock, while the consensus estimate is at $54.04. Verizon closed Friday at $48.35.

Growth is one area that Wall Street does not worry about when analyzing the wireless, cloud and tower stocks. What is always on the front burner is competition, which equals pricing. The companies that can maintain their market share without compromising margins and then their bottom line will continue to flourish. In a market that continues to grow, this issue is yet to be settled.