The simpler version of AT&T without its media assets has attractive upside, and investors should take advantage of the recent dip, according to UBS.
UBS' upgrade of AT&T's stock came four days after AT&T's deal with Discovery to spin off WarnerMedia and combine it with the entertainment company. Since the deal was announced Monday, AT&T's stock has dropped 8%.
UBS analyst John Hodulik raised his rating to buy from neutral, saying in a note to clients on Friday that the leaner version of AT&T had a clearer pathway to improving its cash-flow growth. He also said shareholders would benefit in other ways even as the dividend is cut.