Even as shares of AT&T (NYSE: T) saw a more than 10% drop on Thursday after the telecommunication giant’s mixed bag of Q1 earnings, HSBC analyst Adam Rumley upgraded the AT&T stock to a Buy from a Hold with a price target of $21. The analyst’s price target implies an upside potential of approximately 19% at current levels.
The analyst noted that there was an “opportunity” amid Thursday’s sell-off and noted, “At some point, this year, subject to FCF generation, the market’s attention should turn to falling CAPEX spend in 2024, a shrinking debt pile and, thereafter, the possibilities for buybacks.”
Rumley added that the profitability of its wireline business continues to be a headwind and more visibility is needed on its fiber optic internet buildout but he approved of AT&T’s current business strategy.
Analysts are cautiously optimistic about AT&T stock with a Moderate Buy consensus rating based on three Buys and eight Holds.
