AT&T upgraded by Deutsche Bank, analyst says worries about a Verizon iPhone already priced in
By APMonday, July 26, 2010
AT&T shares upgraded at Deutsche Bank
SEATTLE — The price of AT&T Inc. shares already takes into account the possibility that the wireless carrier will face competition for iPhone customers, a Deutsche Bank analyst said Monday.
THE OPINION: Analyst Brett Feldman wrote in a client note that he expects strong growth in AT&T’s wireless subscriptions and stabilizing revenue from wired subscribers. He said AT&T could pursue an $8 billion stock buyback, which would boost per-share earnings and increase the percentage size of shareholders’ stakes.
Feldman also said that if the iPhone goes on sale with Verizon Wireless or another cell phone carrier in the U.S., he expects AT&T’s 2011 earnings per share to take a 12-cent hit at worst. However, he thinks that risk is already priced into the stock.
THE STOCK: Feldman boosted his rating on AT&T shares to “Buy” from “Hold” and raised his price target to $31 from $30. AT&T’s shares gained 49 cents, or nearly 2 percent, to $26.03 in afternoon trading.
