Barclays lowered its rating on Verizon's stock on Tuesday to overweight from equal weight, bringing its rating in line with other telecommunications companies in what it sees as an diminishingly diverse industry.
"While we like [Verizon's] near-mid term prospects, we believe valuation will cap upside potential from present levels and therefore downgrade it," Barclays analyst Kannan Venkateshwar said.
Shares of Verizon slipped 1.3 percent in premarket trading following the call.
Venkateshwar said telecom is "an industry united more by differences than similarities," as "the four major operators tend to diverge meaningfully" on approaches to what are broadly the same markets." As he assumes coverage of the four telecom stocks – Verizon, AT&T, T-Mobile and Sprint –Venkateshwar said the growth of "a potentially more oligopolistic industry structure" is part of price shrinking "as a key competitive differentiator."
Barclays also lowered its price target on Verizon to $50 per share from $56 per share. The stock closed Friday at $54.37.
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