Analyst Upgrade Boosts Struggling AT&T Stock

The equity is trading at its lowest level in over a decade

Deputy Editor
Dec 16, 2021 at 10:02 AM
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The shares of telecommunications giant AT&T Inc. (NYSE:T) are up 5.5% at $23.38 at last check, following a bull note from Morgan Stanley. The firm upgraded the equity to "overweight" from "equal weight," citing above all other key factors the pending completion of the merger between Discovery (DISCA) and AT&T's WarnerMedia. Morgan Stanley did, however, lower its price target on T to $28 from $32.

The majority of analysts were pessimistic on the security coming into today, leaving plenty of room for additional bull notes going forward. Of the 20 in coverage, 13 still called AT&T stock a "hold" or worse.

There's room in the options pits for increased optimism as well. This is per T's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 83% of readings in the equity's annual range. This indicates puts are being picked up at a faster-than-usual rate.  

Today's options pits are alive with activity following the upgrade. In the first half hour of trading, over 64,000 calls and 10,000 puts have exchanged hands, which is four times the amount typically seen at this point. The most popular is the weekly 12/31 23-strike call, followed by the 23 call from the December series. 

AT&T stock will need a lot more positive price action to recover any significant ground. After breeching a familiar floor at the $27 level, the equity steadily chopped lower on the charts, yesterday hitting its lowest level since 2009. Year-over-year, T is off 26.8%.


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