NEW YORK (TheStreet) -- Frontier Communications (FTR) soared after an analyst upgraded the stock and raised its price target. AT&T (T) jumped following a price target increase by Jefferies and decision to add it to its Franchise Picks list.
Frontier Communications soared 4.3% to close at $5.38.
The provider of telephone service to small and rural communities spiked after DA Davidson upgraded the company to a buy from neutral, according to a report in Barron's. However, the Davidson analyst lowered the price target on Frontier.
In making this decision to lower the price target to $6.50, the analyst, according to Barron's, said, "Our new 12-month target is based on our multiple of 7.1 times (from 7.0x, to give benefit for the deal) to our 2016 EV/EBITDA estimate of $2,205 million. Our price target equates to a 6.5% yield."
The deal is in reference to Frontier's plans to use nearly $2 billion raised through its issuance of stock and convertible debt toward its $10.5 billion buyout of Verizon Communications' (VZ) wireline.
Meanwhile, Wall Street's price target for Frontier is $7.23, according to a 24/7 Wall Street report. Frontier closed in the lower portion of its 52-week range of $4.90 to $8.46.
AT&T jumped 2% to end the day at $35.04.
The stock climbed higher after Jefferies increased its price target to $40 from $39. The firm also added AT&T to its Franchise Picks list. The stocks on this list represent Jefferies' U.S. equity research team's "highest conviction" buy-rated stocks.
In lumping AT&T into the mix, Jefferies noted it felt analysts were "overly bearish" on the carrier's prospects, as it works its way through the DirecTV (DTV) merger and its acquisitions in Mexico.