Morgan Stanley upgrades AT&T amid broadband competition; downgrades Comcast

Investing.com -- Morgan Stanley analysts are bullish on AT&T Inc (NYSE: T) and T-Mobile US Inc (NASDAQ: TMUS), rating both stocks "overweight," on growth potential in fiber and wireless services, respectively.

“We find the US wireless industry structure today supportive of growth, while broadband competition likely intensifies,” analyst wrote.

AT&T, earlier “equal-weight,” was named a top pick in the telecom and cable sector. Morgan Stanley (NYSE: MS) also raised its price target on the stock to $28 from $19.

While the bank downgraded Comcast Corp (NASDAQ: CMCSA) to "equal-weight" due to challenges in broadband competition and expected EBITDA growth pressure in 2025.

Brokerage said T-Mobile shares have outperformed for years, but the tailwinds from brand, customer service, and network leadership combined with the lack of headwinds from legacy revenue streams support industry-leading growth ahead.

Morgan Stanley expressed caution on the broader cable segment, maintaining "equal-weight" ratings on Charter and Liberty Broadband (NASDAQ: LBRDA), and "underweight" rating on Sirius XM (NASDAQ: SIRI).

The note also highlighted a cautious credit outlook, recommending select bonds in Charter and EchoStar.

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