Today, AT&T (T) stock hit a new 52-week high of $39.02. The stock was up 1.3% at $39.00 as of 1:48 PM EDT. AT&T stock is rising since the company released its third-quarter earnings results on Monday, reflecting investors’ optimism.
Why AT&T stock is up
Among telecom stocks, AT&T has generated significant returns so far this year. The stock has outperformed its peers and the S&P 500 Index. AT&T has returned 34.9% year-to-date. In comparison, the S&P 500 Index has risen 21.2%. Peers T-Mobile (TMUS) and Sprint (S) are up 30% and 6.7%, respectively.
Earlier today, two analysts raised their price targets for AT&T stock. J.P. Morgan has increased its price target to $42 from $39. JPM analyst Philip Cusick maintained his “overweight” rating for AT&T. As The Fly reported, Cusick increased the target price “after layering in HBO Max estimates to his model and given the company some benefit for additional cost cutting.” Cusick expects domestic HBO Max customers to reach 47 million by 2025 from 34 million in 2020.
Bernstein also increased its target price for AT&T stock to $38 this morning.
Of the 29 analysts who follow AT&T, 48.3% have a “buy” rating. Also, 48.3% have a “hold” rating, and 3.4% have a “sell” rating. Wall Street’s price target stands at $38.02 for AT&T stock, which is 1.2% below T’s last closing price of $38.49.
In May 2020, AT&T’s WarnerMedia division is planning to launch a direct-to-consumer video streaming service called HBO Max. The company intends to price HBO Max at $14.99 a month.
Curious about how it could help the company? Check out Can HBO Max Lead AT&T Stock Higher in 2020? to learn more about the streaming service.
Elliott Management’s stake in AT&T
Elliott Management, which revealed a $3.2 billion position in AT&T on September 9, has been pushing the telecom company to divest non-core assets like DIRECTV. The hedge fund also asked the company to stop making acquisitions and eliminate $5 billion in costs. The activist investor believes AT&T stock could be worth more than $60 per share in the next two years.
Over the last few months, AT&T has been monetizing non-core assets. For 2019, the telecom company anticipates monetizing approximately $14 billion of assets. And for the third quarter, AT&T reported an adjusted EPS of $0.94 on revenue of $44.6 billion.
See AT&T on the Defensive after Loss of Subscribers and AT&T Stock Rises on Q3 Earnings Beat, Guidance to learn more. Also check out Will AT&T and Elliott Management Find Common Ground?