Deutsche Bank analyst Matthew Niknam was out pounding the table on AT&T Inc. (NYSE:T) Thursday, reiterating a Buy rating and price target of $45, which represents a slight upside potential from current levels.
Niknam wrote, “We provide several tailwinds which continue to support a (relatively) positive outlook, including: (1) lower-risk (mid-single digit) EPS growth in upcoming years, supported by scale and M&A synergies (96% of revenues are US-based), (2) AT&T’s (still attractive) 4.6% dividend yield, especially when compared to declining government bond yields, and (3) several potential upside catalysts in 2H16 heading into 2017.”
“Our positive view on T is a function of: (1) “best in class” strategic positioning, as its scale across “pipes” (ie: video, mobility) provides a natural hedge against changing consumption preferences, (2) a clear path to (above consensus) midsingle digit EPS/FCF growth, given deal synergies (DTV) and cost savings initiatives (Project Agile), and (3) an attractive 5% dividend yield, with historical spreads (vs. 10-year UST) implying upside north of $50/share,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matthew Niknam has a yearly average return of 23.9% and a 79% success rate. Niknam has a 10.8% average return when recommending T, and is ranked #151 out of 3990 analysts.