UBS: AT&T, Amazon, and Spotify are the top TMT stocks for 2024
UBS analysts have listed AT&T, Amazon, and Spotify as their top TMT stocks for 2024. AT&T has shown strong performance in the telecommunications sector, with expected free cash flow reaching $17 to $18 billion. Amazon is benefiting from GMV growth and regionalization of delivery, which may boost stock performance. Spotify maintains a leading position in the music industry, with expected user growth and improved monetization driving revenue growth and margin expansion
According to the Zhitong Finance and Economics APP, UBS analysts have listed AT&T (T.US), Amazon (AMZN.US), and Spotify (SPOT.US) as the most worthwhile TMT stocks to hold in 2024.
UBS considers AT&T as its top choice in the cable, satellite, and telecommunications services sector. The bank believes that AT&T's positioning is to maintain EBITDA growth while also maintaining a low churn rate, sustained fiber revenue, pricing power, and cost control. The bank stated that the company is moving towards the higher end of the 2024 free cash flow guidance range ($17-18 billion).
Amazon is UBS's top choice among large internet stocks. UBS stated that growth in Gross Merchandise Volume (GMV) and efforts in regionalizing delivery should prompt consumers to consider faster delivery speeds and higher levels of service. Additionally, expanding profit margins in segmented markets will put Amazon's stock in a favorable position. The bank added that Prime Video with advertising could become a high-profit catalyst.
Spotify is UBS's top choice in media stocks. UBS stated: "We believe the monetization recovery in the music industry is still in its early stages, and we expect Spotify to maintain its industry-leading position in Digital Service Platforms (DSPs). We believe that continued user growth and better monetization of the existing user base will drive revenue growth for the company." The bank also mentioned: "After years of balancing profits and losses, we believe Spotify can continue its recent pace of margin expansion, driving the transformation of EBITDA in the coming years."