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Cramer: Elliott Management's AT&T Stake Is A Reason To Buy Telecom Stock

Jayson Derrick

Influential media analyst Craig Moffett of MoffettNathanson downgraded AT&T Inc.(NYSE: T) rating to Sell — a recommendation CNBC's Jim Cramer doesn't agree with.

Cramer Says AT&T Bulls Aren't Banking On Guidance 

Moffett's bearish stance on AT&T boils down to the company's inability to hit its 2020 and 2022 guidance.

But even if the research analyst is right and AT&T falls short of expectations, it wouldn't matter, as none of the bulls are "really banking on those numbers," Cramer said on Monday's "Mad Money."

AT&T's stock price, which is near $38, already factors in the possibility of the telecom missing its targets, he said. 

In the event AT&T hits its guidance next year and again in three year,s the stock can go "much higher," Cramer said.

The Elliott Management Factor

The case for owning AT&T's stock is based on Elliott Management's stake in the telecom company, the CNBC host said. 

The activist investor is "forcing" management to "get its act together," he said, adding that this sort of pressure is welcome at a company that's guilty of "a decade of complacency."

Elliott is likely paying close attention to its investment and could be prepared to "come down on them like a ton of bricks" and push for a new management team, Cramer said.

Buying AT&T's stock at its current level is a bet that the company has much higher potential for growth in the coming years thanks to a "more focused leadership" team, he said. 

The stock was trading 0.47% higher at $38.22 at the time of publication Tuesday. 

Related Links:

AT&T Shares Lower On Concerning TV Subscriber Trends

Sell-Side Raises Expectations On AT&T After Earnings Beat, Guidance

Photo by Luismt94/Wikimedia. 

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