Benzinga | Oct 14, 2021 08:31AM EDT

KeyBanc Remains Cautious On AT&T Despite Rating Upgrade

* KeyBanc analyst Brandon Nispel upgraded AT&T Inc (NYSE:T) to Sector Weight from Underweight without a price target.

* It appears more difficult to justify further downside from current levels given simplification of the business, reduced leverage, and peers that trade at premiums, Nispel notes.

* The analyst cautions that he does not recommend owning AT&T and see a modest downside but thinks further downside might support a more favorable risk/reward.

* AT&T trades at a forward P/E multiple of 8.3x versus Verizon Communications Inc (NYSE: VZ) at 9.6x, PT Telkom Indonesia (Persero) Tbk (NYSE: TLK) at 15.2x, Orange SA (NYSE: ORAN) at 8.5x, and Telefonica SA (NYSE: TEF) at 10.6x.

* Price Action: T shares traded higher by 0.99% at $25.55 in the premarket session on the last check Thursday.