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Text size A sign is posted in front of an AT&T retail store in San Rafael, California. Justin Sullivan/Getty Images AT&T could finally start catching up to its main rival, prompting analysts at Citi to place the stock on a three-month catalyst watch.“We believe the potential for consensus expectations to rise for postpaid phone net adds and forward progress towards closing the deal with Discovery (ticker: DISCA) could lead the valuation gap to narrow between A T &T (T) and Verizon (VZ),” analyst Michael Rollins wrote on Tuesday.The merger between Discovery and AT&T’s WarnerMedia subsidiary was given the green light by the European Commission in early January, boosting expectations that the deal will close mid-2022. Rollins believes the deal’s close will be an important catalyst for AT&T’s stock, in addition to the company’s ability to attract new customers.AT&T said last week it added a net 1.3 million postpaid phones in the fourth quarter, above consensus.Rollins reiterated a Buy on the stock and a $29 price target, in line with the consensus target price of $30.25, according to FactSet. Of the 29 analysts covering the stock, 10 rated it a Buy or Overweight, 16 rated it a Hold, and three gave it a Sell or Underweight.The possibility that the merger falls through is a real risk to the analyst’s bullish scenario. Other risks include the intense levels of competition within the industry, higher interest rates, execution problems from other acquisitions, increasing pressure from cord-cutters, and migration to streaming platforms, Rollins added. AT&T stock was up 0.3% Tuesday, trading at $26.55. The stock has gained almost 8% this year.Write to Sabrina Escobar at sabrina.escobar@barrons.com
Justin Sullivan/Getty Images
AT&T could finally start catching up to its main rival, prompting analysts at Citi to place the stock on a three-month catalyst watch.
“We believe the potential for consensus expectations to rise for postpaid phone net adds and forward progress towards closing the deal with
Discovery (ticker: DISCA) could lead the valuation gap to narrow between A
T &T (T) and
Verizon (VZ),” analyst Michael Rollins wrote on Tuesday.
The merger between Discovery and AT&T’s WarnerMedia subsidiary was given the green light by the European Commission in early January, boosting expectations that the deal will close mid-2022. Rollins believes the deal’s close will be an important catalyst for AT&T’s stock, in addition to the company’s ability to attract new customers.
AT&T said last week it added a net 1.3 million postpaid phones in the fourth quarter, above consensus.
Rollins reiterated a Buy on the stock and a $29 price target, in line with the consensus target price of $30.25, according to FactSet. Of the 29 analysts covering the stock, 10 rated it a Buy or Overweight, 16 rated it a Hold, and three gave it a Sell or Underweight.
The possibility that the merger falls through is a real risk to the analyst’s bullish scenario. Other risks include the intense levels of competition within the industry, higher interest rates, execution problems from other acquisitions, increasing pressure from cord-cutters, and migration to streaming platforms, Rollins added.
AT&T stock was up 0.3% Tuesday, trading at $26.55. The stock has gained almost 8% this year.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
Source: https://www.barrons.com/articles/att-stock-price-upgrade-buy-verizon-51641904954?siteid=yhoof2&yptr=yahoo