(Bloomberg) -- AT&T Inc. shares rose 3.2% on Friday, after HSBC took advantage of a steep earnings-driven selloff to upgrade the telecom company to buy from hold.

Most Read from Bloomberg

• Elon Musk’s Wealth Plunges $13 Billion as Drama Unfolds Across Empire

• Tesla Increases Price of Model S, X in US After Shares Slump

• SpaceX Says It Blew Up Starship Rocket After Engine Mishap

• Cities Keep Building Luxury Apartments Almost No One Can Afford

• Airline Blunder Sells $10,000 Asia-US Business Class Tickets for $300

Disappointing results led to a 10% slump in Thursday’s session, the biggest one-day percentage loss for AT&T since December 2000. The stock closed at its lowest since October on Thursday.

“We see an opportunity in the selloff,” wrote analyst Adam Fox-Rumley, adding that “the market, in our view, has over-reacted.”

Free cash flow was seen as a particular negative from AT&T’s results. The company reported $1 billion in free cash flow in the quarter, well below the $3.02 billion that had been expected. Bloomberg Intelligence wrote that AT&T missed “where it matters most,” adding that the cash flow “may rekindle concern about its ability to fund its dividend.”

Fox-Rumley wrote that while concerns about cash generation are understandable, “it remains plausible, in our view, that FCF guidance can be met.” He added that a slowdown in market momentum “has been widely flagged (by all operators) for months, and AT&T’s absolute growth in mobile subs remained solid.”

The firm has a $21 price target on the shares, compared with the Friday close of $18.22.

HSBC isn’t the only firm to view Thursday’s decline as excessive. Wells Fargo Securities wrote that it was “way overdone,” as subscriber numbers were healthy, albeit decelerating.

“While questions over FCF will persist, we would buy the dip,” wrote analyst Eric Luebchow, who has an overweight rating on the stock.

Bank of America Corp. was even more emphatic, writing that “there is no fundamental explanation” for how the stock was “historically down” on Thursday. It added that positioning by hedge funds was “the only explanation,” and that the valuation is compelling.

Among AT&T peers, Verizon Communications Inc. rose 0.4% on Friday and T-Mobile US Inc. gained 0.2%.

(Updates to market close.)

Most Read from Bloomberg Businessweek

• TikTok’s Algorithm Keeps Pushing Suicide to Vulnerable Kids

• How a Brazen Plot to Rig Oil Auctions Cost Venezuela Billions

• The Nord Stream Explosion Remains an Unsolved Mystery Gripping Europe

• With 4% Savings Accounts, Is It Finally Time to Break Up With Your Bank?

• The Repo Man Returns as More Americans Fall Behind on Car Payments

©2023 Bloomberg L.P.