AT&T Stock Upgraded. The Case to Buy the Dip After Selloff.

AT&T stock has slipped 11% over the past three months. (Dreamstime)

Key Points

• KeyBanc analyst Brandon Nispel upgraded AT&T shares to Overweight from Sector Weight, setting a $30 price target.
• AT&T is positioned to lead in network convergence, integrating 5G, fiber-optic broadband, and Wi-Fi on one platform.
• AT&T’s stock has fallen 11% in three months, despite a $23 billion spectrum license deal and better-than-expected subscriber additions.

AT&T stock has been on a bad run—but investors should see that as an opportunity to buy the dip, according to KeyBanc analyst Brandon Nispel.

He upgraded the wireless carrier’s shares to Overweight from Sector Weight on Tuesday, issuing a $30 price target that implies AT&T can climb 19% from its current level.

The analyst believes AT&T is best-positioned to win the battle for convergence, which refers to wireless companies’ race to offer historically separate networks such as 5G, fiber-optic broadband, and Wi-Fi on a single platform.

AT&T one-upped rivals T-Mobile US and Verizon Communications in August when it agreed to buy $23 billion worth of spectrum licenses from EchoStar . The deal gives AT&T the exclusive rights to a slice of the radio-frequency spectrum in specific areas, as it bids to extend its lead in 5G and fiber.

The stock didn’t get much of a boost from the deal, though. Shares have slipped 11% over the past three months. The S&P 500 is up 6.2% over the same period.

The selloff is probably down to “overblown” concerns about the fierce battle for mobile phone subscribers, Nispel wrote in a research note. AT&T eased some of those worries last month, when it reported better-than-expected subscriber additions for the third quarter.

Write to George Glover at george.glover@dowjones.com