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Here's Why AT&T Stock Spiked on Thursday

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Shares of telecommunications giant AT&T (T - Free Report) surged higher Thursday after Morgan Stanley analyst Simon Flannery raised his rating on the stock to Overweight from Equal Weight. He argued that the $43 billion deal to combine its media assets with Discovery (DISCA - Free Report) will create “a much clearer and focused communications business.”

The mega media deal with Discovery is expected to close late next spring, but AT&T has yet to determine how the deal will look for shareholders, meaning if the move will result in a spin-off (providing cash) or a split-off (providing shares).

AT&T recently posted stronger-than-expected Q3 earnings driven by impressive subscriber gains for HBOMax. AT&T now expects its global subscriber base to rise to between 70 million and 73 million by the end of the year.

T has fallen about 20% over the past six months, and is currently a #3 (Hold) on the Zacks Rank.


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