By Sam Boughedda

In a be aware Wednesday, Morgan Stanley analyst Simon Flannery reiterated an Chubby score and $22 value goal on AT&T (NYSE:), outlining a possible path to a 20% return from present ranges.

“Better visibility into the monetary efficiency of the corporate publish the spin-off of WarnerMedia, together with a possible for incremental return of capital and defensive sectors re-rating increased, may present extra upside for the AT&T inventory,” wrote Flannery.

Regardless of the market downturn in 2022, AT&T shares are performing effectively this yr, having gained 13.5% to date.

The analyst pointed to AT&T’s early April spin-off of WarnerMedia as a constructive, permitting traders and administration to give attention to the core communications enterprise.

“We imagine the Stay co. presents traders a horny valuation, a delevered stability sheet, and defensive positioning in a risky market,” stated the analyst.

Flannery has a $27 bull case on AT&T shares and believes “additional materials upside would require traders to realize larger visibility into monetary efficiency for 2023 and past, which may in flip open up the potential for added return of capital. A extra modest transfer to $24 would generate a complete 12-month return of round 18%.”