Skip to main content

Market Overview

AT&T Downgraded By Citi On Dividend Demand For Interest

Share:
AT&T Downgraded By Citi On Dividend Demand For Interest

AT&T Inc. (NYSE: T) shares have climbed 6 percent in the past month. Citi’s Michael Rollins downgraded the rating on the company from Buy to Neutral, citing largely valuation. The price target has been raised from $42 to $46.

The low interest rate environment, favorable cost cutting prospects from the DIRECTV (NASDAQ: DTV) acquisition and a solid dividend yield have boosted AT&T’s shares, putting valuation multiples near historic highs, Rollins noted. He added that for shares to rise further, rates would need to decline; however, the 10-year treasury rate is expected to rise over the next 6-18 months, limiting further upside for shares.

2Q16 Preview

AT&T is scheduled to report its 2Q16 results on July 21. Rollins reduced the EPS estimate for the quarter falls from $0.73 to $0.71, a penny below the consensus, on lower Wireless service revenue. The total revenue and OIBDA estimates are at $40.9bn and $13.25bn, versus consensus expectations of $40.7bn and $13.66bn, respectively.

The EPS estimates for 2016 and 2017 have been reduced from $2.90 to $2.86 and from $3.01 to $2.98, respectively.

“We could be more positive [on the stock] if free cash flow growth is better than expected while we see debt levels as a risk should interest rates rise,” Rollins commented.

Latest Ratings for T

DateFirmActionFromTo
Feb 2021OppenheimerDowngradesOutperformPerform
Jan 2021Credit SuisseMaintainsNeutral
Jan 2021Raymond JamesUpgradesMarket PerformOutperform

View More Analyst Ratings for T
View the Latest Analyst Ratings

 

Related Articles (T)

View Comments and Join the Discussion!

Posted-In: Citi Michael RollinsAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
SAMEvercore ISI GroupMaintains1,500.0
SEAutonomous ResearchInitiates Coverage On378.0
ALHCMorgan StanleyInitiates Coverage On36.0
ALHCRaymond JamesInitiates Coverage On30.0
HAEMorgan StanleyDowngrades83.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com