One of the hallmarks of the Trump campaign was the focus on eliminating unneeded and burdensome over-regulation. In fact, many business leaders have pointed to excessive rules and regulations as the biggest hindrance to putting more corporate capital to work. Two areas that are expected to benefit big when the new administration is in office are telecom and cable.

In a new research report Jefferies notes that the new Federal Communication Commission under Trump is likely to roll back the previous administration’s decisions, and two of the biggest items that could be reversed or modified are Title 2 of the Communication Act and net neutrality.

The Jefferies team notes this in the report in regards to Title 2:

This is almost a certainty and would be a significant positive for both telecom and cable, with telecom perhaps benefiting slightly more given exposure to both wireline and wireless. Look for more usage based pricing and pricing power for standalone broadband products.

They mention this in regards to net neutrality:

This will be particularly positive for large telecom and cable. as they may soon be able to take payments from Google, Facebook, etc to have their data/bits travel faster than others.

Four companies could be big winners according to Jefferies.

AT&T

This company has had an incredible run this year but is off over 10% in less than six weeks. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE. The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions.

With its shares trading at a very cheap 14.3 times estimated 2016 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic but increased device financing plans.

AT&T is the top dividend-paying stock in the US 1 portfolio and has several major catalysts that likely will drive strong network traffic demand: DirecTV Now and Mobile, “Data-Free TV” for DirecTV/U-Verse subscribers and increasing penetration of unlimited data plans. Many on Wall Street believe that the company is well-positioned to address ongoing traffic requirements, with additional LTE capacity available and the ability to leverage small cell deployments.

Other top Wall Street analysts have cited the company’s positive commentary on free cash flow and improving video/broadband trends later this year, with single truck-roll and new converged offerings expected to be coming next month.

AT&T investors receive a 4.96% dividend. The Wall Street consensus price objective is $40.76. Shares closed on Tuesday at $39.48.

Charter Communications

This top cable giant is another company Jefferies expects to benefit. Charter Communications Inc. (NASDAQ: CHTR) is a leading broadband communications company and the fourth-largest cable operator in the United States. It provides a full range of advanced broadband services, including Spectrum TV video entertainment programming, Spectrum Internet access and Spectrum Voice. Spectrum Business similarly provides scalable, tailored and cost-effective broadband communications solutions to business organizations, such as business-to-business internet access, data networking, business telephone, video and music entertainment services and wireless backhaul.

Top Wall Street analysts have cited potential growth and strong free cash flow generation post the merger with Time Warner Cable and Bright House Networks as a huge positive. They also note they feel that the merger concerns are way overblown and they expect the company to aggressively seek subscriber acquisition.

The consensus price target for the stock is $298.33. The shares closed most recently at $280.49 up 3.57%.

Comcast

This broadcasting and cable-related stock could have solid upside potential and benefit from a relaxation of regulations. Comcast Corp. (NASDAQ: CMCSA) is one of the nation’s largest video, high-speed internet and phone provider to residential customers under the XFINITY brand and also provides these services to businesses. Comcast has invested in technology to build an advanced network that delivers among the fastest broadband speeds and brings customers personalized video, communications and home management offerings.

Comcast has consistently been growing earnings substantially with extremely strong content revenue growth. Increased revenue at NBC Universal is also giving the company some earnings tailwinds, and a growing sports lineup is adding to revenues.

Some top Wall Street analysts see cable giants like Comcast as a top growth story that still has plenty of room to run, as well as generating solid earnings to support continued stock buybacks.

Comcast investors receive a 1.6% dividend. The consensus price objective is $75.74, and shares closed trading on Tuesday at $70.14, up 2.7% on the day.

Verizon Communications

This is another top telecommunications company that Jefferies sees as a beneficiary of the relaxed regulations. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world. Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

The company reported solid third-quarter earnings; however, revenues came in short of Wall Street and Merrill Lynch expectations. Verizon also recently announced the purchase of Yahoo’s core operating business for $4.8 billion in cash. The analysts feel it plays into Verizon’s strategic drive to expand into advertising and content, and they also think the transaction is largely immaterial from a financial perspective.

Verizon investors receive a 4.53% dividend. The consensus price objective is set at $50.96. The shares closed Tuesday at $50.89.

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All these companies are expected to benefit from the changes in Title 2 and net neutrality. Jefferies also pointed out that mergers and acquisitions could be more accommodating at the FCC with the new administration in place and cited T-Mobile, Dish Network and Sprint as potential winners.

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