MoffettNathanson downgrades AT&T stock to Undeperform, slashes price target

Yahoo Finance Live anchors discuss MoffettNathanson’s 2023 profit outlook for Verizon and AT&T.

Video transcript

BRAD SMITH: Let's also check in on a few telecommunications companies, as shares of Verizon, as well as AT&T, they're moving this morning. This is following a 2023 outlook from MoffettNathanson showing an upgrade to market perform from underperform for Verizon and downgrading AT&T to underperform from market perform. We're taking a look at shares of both Verizon is higher by about 4/10 of a percent. AT&T down right now by about 1 and 1/2%.

And this is just something that they do cyclically, looking back over the past year and then trying to refresh some of the theme perspectives that they have. But this moving shares of both of those telecoms companies.

BRIAN SOZZI: Yes, a small nuance for me on the bottom of this report, you have another, I would say, research shop highlighting T-Mobile and the really strong year they have had. They're saying T-Mobile, once again, looks like the industry's most attractive investment. That continues to be the vibe on Wall Street when it comes to telecoms. Of course, T-Mobile got some really great spectrum from the acquisition of Sprint. They have also just cut a lot of expenses at this business. CEO Mike Sievert just operating a lot faster than some of his competitors.

JULIE HYMAN: Well, and so it's interesting here because Craig Moffett over there, at SBV MoffettNathanson, saying that it is not-- their sort of fundamental views of these companies have not changed. They've liked T-Mobile, and they've thought that AT&T and Verizon were weaker. It's just a matter of what the stocks have done.

So, they, in their view, AT&T has outperformed sort of unjustifiably so. And Verizon has been hit perhaps maybe unjustifiably so, or too much given, even though its outlook is sort of anemic. Maybe it's down too much. So it seems to be mostly a valuation call that they're making on AT&T and Verizon, specifically even as they're still positive on T-Mobile.

BRIAN SOZZI: Well, you have AT&T. You have AT&T. A large reason why it has done pretty well this year is they no longer have those media assets. They've dumped that over on Discovery. And look at all the writedowns they're now seeing. So their cost base has really improved this year.

JULIE HYMAN: Yeah, but the fundamental business is still--

BRIAN SOZZI: Yeah, they're still selling phones.

JULIE HYMAN: --kind of meh, I think.

BRAD SMITH: Well, we'll see what part of the cycle that we're at and people buying phones out there and starting up some of those new plans. Perhaps we'll get a better insight after the holiday season once we see how many of those new devices have been worked through as well.