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AT&T Seeks Buyer For Its DirecTV Unit – Report

AT&T Inc. is searching for buyers for its DirecTV business, The Wall Street Journal (WSJ) reported on Friday citing people familiar with the matter. Shares of the telecommunications and wireless service providers are trading 1.5% higher in the pre-market trading session today.

According to the report, AT&T (T) has hired Goldman Sachs to help in the process of offloading its stake in the satellite TV service to private-equity buyers. The report lists Apollo Global Management Inc. and Platinum Equity as potential buyers.

AT&T bought DirecTV for a hefty amount of $49 billion in 2015. The WSJ report, however, says that the new deal is unlikely to match the buying price and could draw approximately $20 billion now. (See T stock analysis on TipRanks).

On August 27, Tigress Financial Partners analyst Ivan Feinseth reiterated his Buy rating on the stock citing the company’s “strength in wireless counteracts COVID-19-driven near-term weakness.” Feinseth believes that “The ongoing 5G rollout, together with AT&T’s ability to leverage its entertainment assets for an extremely high dividend yield, will drive long-term shareholder value creation, making the shares a compelling value.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 8 Buys, 3 Holds, and 1 Sell. With shares down over 23% year-to-date, the average price target of $34.40 implies upside potential of 14.5% to current levels.

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Amit Singh
Amit Singh jumped into the world of stock analysis and investing after completing his Post Graduate Diploma in Finance in 2009. Before joining TipRanks in 2020, he worked as an equity research analyst for eight years. With a keen eye for identifying strategic investment opportunities, his work entails evaluating stocks, building financial models, writing company-specific research reports, and identifying the overall financial worth of companies in the consumer staples and technology sectors. In 2017, Amit found a way to combine his expertise in evaluating companies with his passion for writing. He has also worked with the financial research firm Market Realist.

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