Why AT&T Stock Declined Today

Shares of AT&T (NYSE: T) have declined today, down by 4% as of 12:10 p.m. EDT, after JPMorgan downgraded its rating on the telecommunications and media giant. Rival T-Mobile also closed its blockbuster acquisition of Sprint, creating a formidable rival.

JPMorgan analyst Philip Cusick cut his rating on the stock from overweight to neutral, while assigning a price target of $35. AT&T's yearslong expansion into media now faces considerable risks associated with the COVID-19 pandemic, which has canceled essentially all live sports events. The crisis will also make it harder for AT&T to fetch good prices for assets it is trying to divest.

Ma Bell agreed last year to divest $10 billion in assets in order to reduce debt and appease activist investor Elliott Management, which took a stake in AT&T in 2019 and started pushing for changes in order to maximize shareholder value. "We still believe there are salable assets at the company, but selling them in a weak market seems short sighted," Cusick wrote in a research note to investors.

Source Fool.com