KeyBanc Remains Cautious On AT&T Despite Rating Upgrade

KeyBanc analyst Brandon Nispel upgraded AT&T Inc (NYSE:T) to Sector Weight from Underweight without a price target.
It appears more difficult to justify further downside from current levels given simplification of the business, reduced leverage, and peers that trade at premiums, Nispel notes.
The analyst cautions that he does not recommend owning AT&T and see a modest downside but thinks further downside might support a more favorable risk/reward.
AT&T trades at a forward P/E multiple of 8.3x versus Verizon Communications Inc (NYSE: VZ) at 9.6x, PT Telkom Indonesia (Persero) Tbk (NYSE: TLK) at 15.2x, Orange SA (NYSE: ORAN) at 8.5x, and Telefonica SA (NYSE: TEF) at 10.6x.
Price Action: T shares traded higher by 0.99% at $25.55 in the premarket session on the last check Thursday.