It is no secret at all that AT&T Inc. (NYSE: T) is locked in a price war that has hurt the company. This is true for all the cellular and telecom carriers, and it is not really a new trend. Still, the end game may not end up as having been a true race to zero. Credit Suisse has held meetings with management of AT&T, and the brokerage and research firm maintained one of the most positive analyst calls on this telecom giant compared to all of Wall Street on Monday.

AT&T’s rating was reiterated as Outperform by Credit Suisse’s Joseph Mastrogiovanni. His call also comes with a $38 price target, which is just $1 shy of the highest analyst price target of $39 for the stock. This is one of those analyst calls that has catalysts geared toward value investors looking for hidden upside not factored into the stock by most investors (nor by most analysts).

Mastrogiovanni was not concerned at all about AT&T being removed from the Dow Jones Industrial Average. He probably was not even concerned that AT&T is one of the most heavily shorted NYSE stocks, and many analysts might just assume that this leaves the door open for one massive short squeeze opportunity if anything less than bad news comes out. This call even stands out more when you consider that AT&T was recently at risk of hitting a 52-week low.

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Credit Suisse’s view is that the firm continues to believe in 2015 catalysts that will drive price appreciation this year. One of the catalysts, the largest by far, is that the firm expects AT&T’s acquisition of DirecTV (NASDAQ: DTV) to close in 2015. Mastrogiovanni said:

Following a meeting with AT&T’s CFO John Stephens, we expect the DTV transaction to close in 1H15 and feel that potential increases to synergy targets could act as a catalyst for the stock… Management remains confident that its acquisition of DirecTV can close in the first half of 2015. Additionally, as previously noted by the company, it should be able to achieve greater synergies than originally anticipated. The original synergy target didn’t include potential revenue synergies, such as benefits from cross-selling and leveraging DirecTV’s distribution channels. Content costs could also drop below DirecTV’s current rate card, which was used for synergy estimates.

An additional quote on valuation after the DirecTV acquisition said:

AT&T is trading at a 2015E P/E multiple of 12.9x compared to its ten-year historical average of 13.6x and the S&P at 17x. We believe the company’s acquisitions provide an opportunity to drive stronger earnings and feel that better than expected synergies could be a catalyst to drive the multiple higher.

Another catalyst is that the AT&T integration (or migration) of Leap is now nearly complete. AT&T has completed the migrating the bulk of Leap’s subscribers to AT&T’s GSM network. The firm believes that AT&T should be able to shut down the CDMA network this year and has already started to refarm Leap’s spectrum in certain markets.

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Credit Suisse further went on to say that AT&T’s management is happy with recent AWS-3 auction results. Mastrogiovanni’s report said:

While the price per MHz-POP was greater than expected, AT&T’s priority was to acquire a large swath, like 2×10, of contiguous nationwide spectrum. The price paid was less than the projections based on a cost avoidance model.

Again, it is always important to remember where a firm stands when evaluating and considering its official rating and price target. AT&T shares were at $32.77 as of Friday’s closing bell. The stock was up 16 cents at $32.93 in mid-morning trading on Monday.

If Credit Suisse turns out to be correct, there is over 15% upside from capital appreciation alone from the post-call share price on Monday. Then there is the 5.7% dividend yield to consider as well, which brings the total return possibility up to over 20%.

AT&T’s consensus analyst target price is only $34 for the next year, and the highest analyst target is up at $39. With a 52-week range of $32.07 to $37.48, it is also hard to not notice that a $38 target would have to imply a new 52-week high and then some. AT&T shares have been stuck in a range of $32 to $36 for most of the past three years.

And what about the worst case analysis for AT&T by Wall Street analysts? There is still one analyst who has a target down in the mid to low $20s. Here is our own 2015 bull and bear case for AT&T, which was one part of the projection for the Dow to hit 19,042 in 2015.

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