AT&T
stock was up Tuesday after a Wolfe Research analyst cited multiple reasons as to why he believes the telecommunications company is a solid, long-term investment.
Analyst Peter Supino upgraded shares of
AT&T
to Outperform from Peer Perform on Tuesday and gave the stock a $21 price target.
Supino wrote in a research note that it’s been “safe to be underweight” on
AT&T
as the stock has provided negative returns over the past three years. However, “amidst apathy and negative muscle memory, we argue that it’s time to take T seriously as a long,” he said.
AT&T shares have fallen 10% over the past 12 months. On Jan. 24, the company provided earnings guidance below Wall Street estimates. Investors have also been concerned about the cost of investing in wireless networks, high debt, declining landline customers, and the unknown outcomes of a Wall Street Journal report regarding lead levels in legacy cables.
However, “amidst bad headlines about convergence, interest rates, and lead, AT&T is growing its core, gaining efficiency, and paying down debt,” Supino wrote.
He also noted that the company has been able to mitigate churn in a competitive environment. AT&T reported fourth-quarter postpaid phone net adds—the number of people who added new lines—of 526,000, which beat expectations of 487,500.
Shares of AT&T were rising 3% Tuesday to $17.31. Shares of competitor
Verizon Communications
were up 0.9% while
T-Mobile US
stock was gaining 0.8%.
Write to Angela Palumbo at [email protected]
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