The key question is whether investors take profits in both stocks after the recent rally on the thought that the stocks are dead money during the review period.

At current prices, the stock only offers 3.7% upside to our $69 target price. We believe the risk reward is more balanced at current levels.

The cries of ‘Who is next?’ will clearly go up after this deal, but we tend to think that this (AT&T-BellSouth) was one of the most logical of the remaining unions.

The quarter is likely to see a mix of positive and negative surprises, reflecting the impacts of mergers and competitive pressures respectively.