A vocal former bear on AT&T Inc.’s stock now feels slightly less pessimistic about the name following an extended slide in the telecommunications company’s shares.
MoffettNathanson analyst Craig Moffett upgraded AT&T’s stock T, +1.23% on Thursday to neutral from sell, writing that “AT&T’s valuation, at last, more appropriately reflects its prospects.” Shares are down roughly 17% from their 2021 closing high of $32.63.
The stock is up 1.2% in Thursday trading.
AT&T’s relative price-to-earnings ratio is “as cheap as it has ever been,” Moffett wrote, one reason why some bulls see the name as “an interesting contrarian long.” Even though the company will be cutting its dividend in conjunction with its plans to spin off its WarnerMedia business, bulls note the company should still have a relatively attractive dividend yield after that transaction takes place.
Moffett, however, is not ready to jump into the bull camp just yet. “We’re partial to contrarian longs, but this doesn’t feel like one to us,” he wrote. “We do conclude, however, that the bloodletting has been enough to move to a neutral posture.”
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