AT&T, Amazon, and Spotify among UBS’ top TMT stocks for 2024
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- AT&T (NYSE:T), Amazon (NASDAQ:AMZN), and Spotify (NYSE:SPOT) were listed among the top TMT stocks to own for 2024 by analysts at equity research and ratings firm UBS.
- AT&T is UBS’s top pick in the cable, satellite, and telecom services sector. The investment bank believes the company is positioned to sustain EBITDA growth, along with low churn, continued fiber gains, pricing power, and cost controls. UBS said the company is tracking toward the high end of the FCF guidance for 2024 (UBSe $17.8B vs. management’s $17-18B; $16.8B last year).
- Amazon is the firm’s top pick among large-cap internet stocks. UBS says AMZN shares are well positioned for GMV growth as fulfillment regionalization efforts should drive greater consideration from consumers’ wallets due to faster delivery/higher level of service in tandem with segment margin expansion. Prime Video with Ads could be a high-margin catalyst.
- Spotify is the firm’s best choice among media stocks. “We believe the recovery of the music industry’s monetization remains in the early days and expect Spotify to maintain its industry-leading position among DSPs. We see sustained subscriber growth (skewing more to developing markets) and better monetization of the existing subscriber base (price ups, new tiers, etc.) as drivers of mid-teens revenue growth. After years of breakeven profits, we believe Spotify can continue its more recent pace of margin expansion, driving an inflection in EBITDA in the coming years (UBSe breakeven in ’23 to €3.6B by ’27E, 10%+ higher than the Street).”