RBC re-evaluates telecommunications stock ratings: upgrades AT&T (T.US) and downgrades T-Mobile US (TMUS.US)

Royal Bank of Canada (RBC) analysts have upgraded the investment rating of AT&T (T.US) over the weekend, and downgraded the rating of T-Mobile US (TMUS.US). RBC is confident in AT&T's growth plans, stating that AT&T will benefit from user growth driven by future fiber investments. They also believe that the additional disclosure regarding the retirement of copper lines is a positive signal. In a report on January 5th, the bank stated: "We expect that by 2027, copper-related costs of $6 billion will decrease by almost half and continue to increase over the next few years." RBC has upgraded AT&T's rating from "sector perform" to "outperform", with a target price raised by $4 to $26, representing a 14.7% upside potential. Regarding T-Mobile US, the bank stated that the company's execution seems relatively robust, but the risk-return ratio is not favorable based on current valuation. They also noted that the company's fundamentals remain strong. Royal Bank of Canada stated: "Part of the reason for the company's growth slowdown in 2025 is the decline in wholesale revenue, and we will closely monitor signs of growth recovery." RBC has downgraded T-Mobile US from "outperform" to "sector perform", with a target price lowered by $15 to $240, representing a 9.5% upside potential.