Raymond James Downgrades AT&T (T) to Market Perform
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(Updated - March 16, 2020 7:36 AM EDT)
(updated to add analyst comments)
Raymond James analyst Frank Louthan downgraded AT&T (NYSE: T) from Outperform to Market Perform.
The analyst commented, "We are lowering our rating on shares of AT&T to Market Perform from Outperform. We believe the higher leverage relative to Verizon, combined with risks to Warner Media from the loss of March Madness, NBA, and other major sports programming and advertising, and continued cord shaving/video subscriber losses (all of which are expected to pressure results and operating metrics) make it less attractive in this environment relative to its peers. The dividend yield remains very attractive, and we see no risk to that, and management has already embarked on a very solid repurchase program, but both of these positive factors are outweighed with the leverage and other issues. That said, the dividend and buybacks likely explain why it is only down 10.3% since 2/20/19. As shown in Figure 1 below, AT&T underperformed the market in the 2008-2009 recession, and if a recession appears later this year, this could be worse for AT&T with a different business mix."
Shares of AT&T closed at $31.15 yesterday.
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