Goldman Sachs downgraded Verizon Communications to "in-line" from "outperform" while upgrading BellSouth to "outperform" from "in-line." Goldman said that typically one major Bell "meaningfully outperforms" the others in any given year. "We think BellSouth has the potential to be the leader in 2005, and a slightly lower valuation relative to growth helps to support this opportunity," it said. "Combining BellSouth's valuation status, with its lower risk capital expenditures and FTTN [fiber to the neighborhood] plans, and its leveraged opportunity in Cingular, we think it should outperform peers in 2005." Cingular is a joint venture of BellSouth and SBC Communications.

Story Continues ...