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April 1, 2020, 9:42 a.m. EDT

AT&T gets a downgrade at J.P. Morgan on risks to media business and more

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By Emily Bary
T SPX

J.P. Morgan analyst Philip Cusick downgraded AT&T Inc.'s shares /zigman2/quotes/203165245/composite T +3.15% to neutral from overweight Wednesday, writing that while he believes the company's 7.2% dividend yield is safe, he has other concerns about the business. He sees risk to AT&T's media unit due to uncertainties about advertising spending as well as ratings trouble for TBS and TNT due to a lack of live sports. Cusick has also been optimistic about AT&T's ability to gain share in the streaming world with its planned May launch of HBO Max but now argues that the service will be "launching into a much slower wireless market, making the product less impactful and taking away a key part of our thesis." From a financial perspective, he wrote that AT&T had been trying to de-lever its business through asset sales, but Cusick believes these could be "less attractive" in the current market. "We still believe there are salable assets at the company, but selling them in a weak market seems short sighted," he wrote. AT&T shares are down 3.6% in morning trading Wednesday. They've lost 20% over the past month as the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.23% has declined 16%.

/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 30.82
+0.94 +3.15%
Volume: 41.38M
May 26, 2020 4:00p
P/E Ratio
15.60
Dividend Yield
6.75%
Market Cap
$219.59 billion
Rev. per Employee
$637,332
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/zigman2/quotes/210599714/realtime
US : S&P US
2,991.77
+36.32 +1.23%
Volume: 3.36B
May 26, 2020 5:20p
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