AT&T Gets a Second Upgrade after Earnings. Raymond James Moves To Strong Buy By

© Stocksak. AT&T (T) Earns Second Upgrade After Earnings as Raymond James Moves to Strong Buy

By Senad Karaahmetovic

Raymond James analysts upgraded AT&T (NYSE:) to Strong Buy from Outperform with a price target of $24 per share.

After Truist raised T stock from Buy to Buy on Friday, the upgrade call follows. The Raymond James analysts, on the other hand, see potential for AT&T shares to outperform rival Verizon (NYSE:) over the next few months.

This is because AT&T is adding more subscribers, increasing EPS growth, and expanding EBITDA margins.

“We believe this stronger rating is appropriate given AT&T’s simpler story is starting to show up in the numbers. We continue to believe a more focused vision along a simpler line of business creates a solid scenario for share price appreciation, and a solid, total return,” the analysts said in a client note.

They also pointed out that telecom stocks are more likely to disappoint in times of economic downturns. They believe that many of these risks have been taken into account when calculating the share price.

The analysts remind clients that T stock is “trading below the 2, 5, and 10-year average P/E despite having a far simpler story today with less cyclical business and better earnings growth than peers.”

“While we still caution investors that telecom stocks may not be the most defensive, the businesses definitely are, and we do not expect weakness in the fundamentals,” they concluded.

AT&T shares are up over 1% in pre-open Monday.

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