Morgan Stanley upgraded the wireless industry to attractive from cautious, and says it believes AT&T Wireless (AWE) is the best way to play the industry for 2003.
Analyst Luiz Carvalho says with free cash flow finally on the horizon, he expects the market to look more favorably on wireless companies despite intense competition. Considering compelling valuations, he believes the industry should outperform the S&P 500 stock index in 2003.
He notes AT&T Wireless' free cash flow should improve by $1.7 billion in 2003 alone. He says he likes the company's balance sheet and its industry position. He raised his $10 year-end 2003 price target to $11, and rates the shares overweight.