Moffett Downgrades AT&T Stock to Sell

MoffettNathanson’s Craig Moffett cut AT&T to sell from neutral Tuesday, questioning whether the carrier can meet the targets it discussed last month in an earnings call (see 1910280060). “Almost as soon as AT&T issued its 2020 and three-year guidance, investors began to struggle with a very simple, but very vexing, question. How in the world can they get there?” Moffett said in a report to investors. AT&T’s wireless business is doing well, the problem is other business lines, he said. “Wireless will have to do an awful lot of heavy lifting.” The entertainment group is a “cancer” and AT&T will start 2020 with at least 15 percent fewer subscribers than at the start of this year, he said. The number of broadband subscribers is also declining, he said: “Business Wireline is shrinking around 4 percent as well, and margins are contracting. The issues there are secular (although a cyclical slowdown would certainly make them even worse). It’s awfully hard to imagine they can reverse those trends. Not even for one year, let alone three.”