AT&T Stock Sees Uplift Following Wall Street Analyst Upgrade

Telecommunications giant AT&T experienced a boost in its stock value on Tuesday, with shares ascending as high as 3.3%. By early afternoon, the stock had sustained a 2.6% increase from the day's start.

The rise in share value can be attributed to a favorable assessment provided by a Wall Street analyst, which acted as a catalyst for the climb.

Could AT&T's Stock Hit $21?

Analyst Peter Supino from Wolfe Research raised AT&T's stock status from peer perform to outperform, indicating a buy signal, and increased his price target for the company to $21. This implies that there could be a roughly 25% gain from the stock's last closing price on Monday.

Supino acknowledged AT&T's lackluster performance over the past few years, with the stock declining by 25% over three years, in stark contrast to the S&P 500’s 34% rise over the same period. However, Supino is now suggesting that the negative sentiment towards the company may be overstated and recommends viewing AT&T as a credible long-term investment prospect.

He also notes that despite some unfavorable narratives concerning industry convergence and interest rates, AT&T is demonstrating growth in its core operations, achieving greater efficiency, and successfully reducing its debt levels.

Signs of a Turnaround for AT&T

AT&T might be on a path to recovery as evidenced by recent developments. The company's latest quarterly performance showed strong revenue, substantial free cash flow, and an increase in subscribers. Importantly, AT&T accomplished its objective of $6 billion in run-rate cost savings and is on track for an additional $2 billion in savings by 2026.

Currently trading close to a 30-year low, AT&T's stock could be an attractive investment as it is trading at a multiple of less than 9 times earnings. The stock's enticing 6.6% dividend yield and a moderate payout ratio of 57% further bolster the case for investing in AT&T.

AT&T, Stocks, Analyst