NEW YORK (TheStreet) -- AT&T Inc. (T) was added to the Franchise Pick list at Jefferies on Wednesday morning. The firm also raised its price target on the telecommunications provider to $40 from $39 and maintained its "buy" rating on the stock.
Jefferies added AT&T to its Franchises Pick list as it believes Wall Street has an "overly bearish" view on the company, which is driven by conservative estimates and questions over the DirecTV (DTV) and Mexican acquisitions.
"DirecTV should remove lingering dividend concerns while providing a complementary product portfolio. Mexico could enhance growth opportunities through a differentiated offer," Jefferies said in an analyst note.
"We see compelling returns for investment in AT&T shares. Our enthusiasm is driven by upside to conservative Street EPS estimates (driven by Wireless margins and ARPU). Furthermore, DTV provides immediate cash flow benefits, and while we assume company guidance on synergies, we see upside to cost savings as well as meaningful revenue and capex synergies," the firm continued.
Shares of AT&T closed at $34.36 on Tuesday afternoon.
Separately, TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AT&T INC (T) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."