4 big analyst cuts: AT&T hit with 2 back-to-back downgrades
Here is your Pro Recap of the biggest analyst cuts you may have missed since Friday: downgrades at AT&T, Twilio, PepsiCo, and Telus International.
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AT&T (NYSE:T) was recently down some 1.7% pre-market Monday after Citi downgraded the company to Neutral from Buy and cut its price target to $16.00 from $22.00 — and also designated it «High-Risk.»
Citi said that while it has «an opportunity to sustain positive revenue growth, improve margins and FCF, and find valuation support near current level,» it also believes AT&T «could incur possible future liabilities and financial risk from the industry’s historical use of lead sheathed cabling.»
JPMorgan, for its part, cut AT&T's rating to Neutral from Overweight with a price target of $17.00 (from $22.00).
The analyst cited the recently surfaced issue regarding the reported toxicity of its old lead-sheathed cables, calling it an «unquantifiable, long-term overhang for the stock, which adds to the risk premium» and drives much of the price target reduction.
JPMorgan also said even though AT&T is trading at very cheap levels, it sees very limited potential for potential upside given the many downward revisions on its fiber growth businesses, the macro high-interest environment, and the uncertainty regarding the lead-sheathed cables.
AT&T is set to report its Q2/23 earnings on July 26. Street estimates stand at $0.60 for EPS and $30.04 billion for revenues.
Piper Sandler downgraded Twilio (NYSE:TWLO) to Neutral from Overweight with a price target of $71.00 (from $56.00). As a result, shares fell more than 2% pre-market today.
According to analysts, the surge in Twilio's stock since disappointing
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