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AT&T upgraded at JPMorgan on attractive valuation

Published 02/01/2024, 09:18 PM
Updated 02/01/2024, 09:18 PM
© Reuters.

JPMorgan lifted shares of AT&T (NYSE:T) to Overweight from Neutral in a note Thursday, raising the stock price target to $21 from $18 per share.

Analysts told investors in a note that the company has mobility growth with strong fiber broadband support, alongside steady free cash flow generation and an attractive valuation.

"The company has been able to show consistent execution in its wireless and broadband businesses and we see solid long-term growth for both segments, especially in broadband with its ongoing fiber build along with incremental opportunities in and out of existing markets," explained the analysts.

"AT&T is through its elevated capital investment spend for 5G and we expect steady FCF generation to support dividend payments and reduce debt," they added.

JPMorgan also notes AT&T's focus on execution and improved stability in the business, pointing to the simplified plans and consistent promotional offerings.

Meanwhile, they believe postpaid phone churn remains relatively stable, and they see the company minimizing its voice subscriber share decline.

"We see AT&T gaining momentum in broadband as the company has reached 26m fiber locations passed and is on track to reach its 30m+ by the end of 2025," said the analysts.

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