Verizon Communications Inc. (VZ) and Charter Communications Inc. (CHTR) both saw their shares jump Thursday on a bullish note from one team of analysts on the Street who recommend that investors buy the telecom companies at their discounted price. (See also: 6 Safe Haven Stocks for a Stormy Market.)

In the note, Goldman Sachs analyst Brett Feldman upgraded the stocks to buy from neutral, citing their high scores across three important factors that contribute to the success of telecom companies; strong network assets and capabilities, large customer bases and strong financials.

“The pipes are not broken,” wrote Feldman, arguing that Verizon and Charter are positioned as long-term leaders in broadband and next generation wireless technology, 5G. 

Core Focus on Connectivity

Shares of Verizon closed up just over 1% on Thursday, marking an 8.1% decline year-to-date (YTD), compared to Charter's 13.1% loss and the S&P 500's 2.9% gain over the same period. 

The decline of traditional telecom has prompted others on the Street to flag weakness as a buying opportunity, indicating that lower quality video revenue will be replaced by higher margin broadband revenues, presenting a more durable, growing cash flow stream. 

Unfairly Punished by Wall Street

Goldman suggests that underperformance across the sector has been driven by investor concerns over a variety of factors including fundamental headwinds, M&A uncertainty and rising interest rates. While AT&T Inc. (T) puts the finishing touches on its Time Warner acquisition and undergoes a bidding war for assets of Twenty-First Century Fox Inc. (FOXA) against the the Walt Disney Co. (DIS) and Comcast Corp. (CMCSA), Feldman suggests that broadband providers Verizon and Charter have been unfairly punished on fears over the costly consolidation in the industry.  

"Put another way, we believe that both operators can drive attractive long-term shareholder returns by sustaining their core focus on connectivity (i.e. building strong pipes)," wrote Goldman. (See also: Verizon Is a Steal at Current Price: Barclays.)