AT&T Gets Hit with a Downgrade from Raymond James

It was not a good way to start off the week for telecommunications and media company AT&T, who received a downgrade from a Raymond James analyst.

Frank Louthan at Raymond James has downgraded shares of AT&T to “market perform” from “outperform” and gave the company’s rival Verizon Communications an upgrade to “outperform.”

“Ultimately this is the game-changing scenario for our sector,” Louthan said in a research note.

The assets of that acquisition of Time Warner in 2018 for $80 billion, now part of WarnerMedia, will create additional drags for AT&T as the economy slows says the analyst. According to Louthan this includes less ad revenue with the cancellation of the NBA, the NCAA tournament and other major sports programming.

It also won’t help as folks cut cords and lose video subscribers, wrote Louthan.

“Our thesis on Verizon has been that while it has a less complicated business model, it had little upside to drive higher valuation or a meaningful catalyst,” the note read. “Given the change in sentiment and market conditions, this no longer seems to be the appropriate way to look at the name. We believe the name has defensive characteristics.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.