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Why Did AT&T Stock Rise on Friday?

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AT&T stock rose 1.29% on Friday

Shares of US telecommunications carrier AT&T (T) rose 1.29% and closed at $30.67 on March 15 after Raymond James upgraded its rating on the company. On a year-to-date basis, AT&T stock has risen nearly 9.3%, but it’s fallen 10.9% in the last year.

AT&T has a market cap of $223.4 billion as of March 15. Telecommunications rivals Verizon (VZ), T-Mobile (TMUS), Sprint (S), and Frontier Corporation (FTR) have market caps of $241.3 billion, $62.5 billion, $26.1 billion, and $0.26 billion, respectively, in the same period.

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Analyst upgrade

On Friday, Raymond James upgraded AT&T stock to an “outperform” from a “market perform” rating and also issued a price target of $34 per share on the stock, representing a 12.3% upside over the next 12 months. Analyst Frank Louthan believes that AT&T has a better and more attractive valuation—and also a better dividend yield—than rival Verizon.

AT&T is trading at a trailing-12-month PE multiple of 10.77x compared to Verizon’s PE multiple of 15.53x. Further, AT&T has a dividend yield of 6.74%, while Verizon’s dividend yield is 4.16%. AT&T has been regularly paying dividends to its shareholders. In the fourth quarter, the company raised its quarterly dividend by 2% to $0.51 per share. AT&T has announced dividend hikes for 34 consecutive years.

Louthan believes that AT&T stock has the potential to perform better than its other telecommunications peers in the sector this year on the back of strong EPS. The analyst expects AT&T to rise ~18% from its current level in 2019.

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