As previously reported, Morgan Stanley analyst Simon Flannery downgraded Verizon (VZ) to Equal Weight from Overweight, as he contends that the stock's 11% year-to-date advance prices in the company's good news, including its $4B free cash flow improvement this year.

While Verizon has actively marketed itself as the first carrier to 5G, this may spur higher spending than currently estimated by consensus, said Flannery. He believes carriers could spend up to $40B on wireless spectrum over the next three years, with Verizon alone spending up to $18B, the analyst added. Additionally, he sees risk of an increased competitive environment.

Flannery maintains a $58 price target on Verizon shares.