AT&T (T -0.36%) stock is going to hit a level it hasn't seen since June 2022. At least that's what analyst Peter Supino from Wolfe Research said when he upgraded shares of the telecommunications company this week.

AT&T stock jumped after the analyst moved it from the equivalent of a neutral to a buy rating with a price target of $21 per share. That would represent a gain of 25% from Monday's closing price prior to the analyst report. It would also mean the stock gets to a level it hasn't seen for nearly two years.

Growing its core, and more

Supino thinks Ma Bell's cycle of bad news and negative market sentiment has finally played out. He noted that "amid bad headlines about convergence, interest rates, and lead, AT&T is growing its core, gaining efficiency, and paying down debt."

Importantly for those wanting to own AT&T for its hefty dividend, AT&T reported strong cash from operations and free cash flow for 2023 when it reported its fourth-quarter and full-year results at the end of January. The company beat its own raised guidance with free cash flow of nearly $17 billion last year.

That's good news for investors relying on income from the telecom company. And Supino pointed out that the company is also still growing subscribers. In the fourth quarter, AT&T reported postpaid phone net adds -- the number of customers adding new lines -- grew more than expected.

AT&T is also experiencing historically low churn levels and what it called "continued strong ARPU (average revenue per user) growth. The stock has already been heading higher over the last six months. The Wolfe Research analysts think there are more positive returns to come.