UBS Cuts AT&T (T) to Neutral on Lower EPS Estimates
Get Alerts T Hot Sheet
Rating Summary:
20 Buy, 29 Hold, 2 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Join SI Premium – FREE
(Updated - September 28, 2016 8:06 AM EDT)
UBS downgraded AT&T (NYSE: T) from Buy to Neutral with a price target of $43.00 (from $46.00). Analyst John C. Hodulik sees lower earnings growth than he originally expected and reduced 2016 and 2017 estimates.
"We are lowering our EPS estimates by 3% to reflect the increased competitive intensity in wireless and incremental costs associated with AT&T's DTV Now roll-out. We now project EPS of $2.84 in 2016 (prior $2.93) and $3.02 in 2017 (prior $3.12), reflecting 4.6% and 6.4% growth, respectively. We continue to believe AT&T is on track to exit 2016 with $1.5B in synergies and reach its $2.5B target next year," said Hodulik.
Discussing increasing competitive intensity in wireless, the analyst said, "We recently highlighted our view that wireless EBITDA growth is set to slow, driven by 3 factors: 1) diminishing benefits from the shift to installment plans, 2) limited upside to savings from lower volumes, and 3) ramping competitive intensity. The recent ~$300 per iPhone promotions suggest this theory is starting to play out, resulting in lower wireless margins in 2H. While this promotion is about to end, we expect carriers to remain competitive in 4Q and with AT&T's new OTT product around the corner and new cable MVNO launches in mid-2017, competitive intensity is only picking up."
For an analyst ratings summary and ratings history on AT&T click here. For more ratings news on AT&T click here.
Shares of AT&T closed at $41.46 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Growth isn't weak enough to truly undercut inflation pressures - BMO
- Synovus Financial (SNV) PT Lowered to $42 at Piper Sandler
- HDFC Asset Management Co Ltd (HDFCAMC:IN) PT Lowered to INR3,325 at Morgan Stanley
Create E-mail Alert Related Categories
Analyst EPS Change, Analyst EPS View, Analyst PT Change, Downgrades, Hot DowngradesRelated Entities
UBS, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!