Jefferies analyst Mike McCormack reiterated a Buy rating and $39 price target on AT&T (NYSE: T) following solid Q1 results. The analyst said revenues pressures are set to ease.

McCormack commented, "AT&T delivered better postpaid adds and churn, with phone only ARPU ahead, and margins beating us by 20bps. Notably, the company sees the low water mark in Y/Y service revenue and ARPU decline rates now passed. Wireline revenue missed, partly driven by F/X, though margins topped our/Street estimates. EPS of $0.63 was in line. DTV synergies were increased by 56%, to $2.5bn. Management maintained capex guidance, and indicated an appetite for ongoing factoring."

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Shares of AT&T closed at $32.86 yesterday.