Morgan Stanley Analysts Bullish on AT&T and T-Mobile

Morgan Stanley analysts have a positive outlook on AT&T Inc (NYSE:T) and T-Mobile US Inc (NASDAQ:TMUS), rating both stocks as "overweight" due to their growth potential in fiber and wireless services, respectively.

The analysts noted that the current structure of the US wireless industry supports growth, although they expect increased competition in broadband.

AT&T, which was previously rated as "equal-weight," has now been designated a top pick in the telecom and cable sector, with Morgan Stanley raising its price target from $19 to $28.

In contrast, the bank downgraded Comcast Corp (NASDAQ:CMCSA) to "equal-weight" citing challenges in broadband competition and anticipated EBITDA growth pressures for 2025.

The brokerage pointed out that T-Mobile's shares have consistently outperformed, driven by advantages in brand, customer service, and network leadership, along with fewer challenges from legacy revenue streams, which is likely to support significant growth moving forward.

Morgan Stanley maintained a cautious stance on the broader cable segment, continuing to rate Charter and Liberty Broadband (NASDAQ:LBRDA) as "equal-weight" and Sirius XM (NASDAQ:SIRI) as "underweight."

The report also flagged a cautious credit outlook, recommending selective bonds in Charter and EchoStar.