Investing in telecom and media has come with challenges in recent years. After all, there is a cutthroat climate in cable, internet and over-the-top offerings. It seems that no one, and many businesses, even cares about having a landline phone any longer. While four companies (and maybe three ahead) duke it out to steal each other’s customers with bundles or lower prices, even most of the homeless population seems to have a smartphone now. Despite all these secular concerns, telecom and cable companies still generally have seen a good 2019 — and there may be continued upside in 2020.

As for AT&T Inc. (NYSE: T), its stock had been dead money for too long to figure. In the wake of its DirecTV acquisition being followed by an expensive Time Warner media acquisition, all of a sudden AT&T was last seen up over 31% on a total return basis (gains and dividends) so far in 2019. That’s slightly better than the tech-heavy Nasdaq-100, and it is seven percentage points better than the S&P 500 and 13 points better than the Dow Jones industrials.

Now investors have to be asking themselves if AT&T’s rise can continue into 2020. At least some on Wall Street feel it can outperform next year. The big issue to consider is that rival Verizon Communications Inc. (NYSE: VZ), which had held better in prior years, was only up 7% on a total return basis in 2019. Sprint Corp. (NYSE: S) remains down about 2%, and would-be acquirer T-Mobile US Inc. (NASDAQ: TMUS) was last seen up about 22% year to date.

While there is much riding on the Sprint/T-Mobile merger for cellular communications, it still has a chance of being completed, and that’s good for both AT&T and for Verizon due to a three-way fight being better than a four-way one.

AT&T itself sees full-year 2019 free cash flow around $28 billion and its EBITDA margin is expected to grow by 200 basis points by 2022. The company’s revenue growth is expected to come from wireless, WarnerMedia and some from Mexico, and its margin growth is expected to come primarily from wireless, merger synergies, Mexico and a focus on operating cost containment. CFO John Stevenson showed guidance on how it expects to improve its balance sheet as follows:

The company has begun retiring shares and is evaluating a 100-million-share accelerated share repurchase program for the first quarter of 2020. By the end of 2022, AT&T expects to retire 100% of the debt it incurred to acquire Time Warner, targeting a net debt-to-adjusted EBITDA ratio in the 2.0x to 2.25x range, and expects this to lead to an upgrade in its debt ratings.

In a cobbled-together list of would-be top picks for 2020, Merrill Lynch has a Buy rating and a $43 price objective. That was implied upside of 15% from the $37.50 share price, or about 20% if you include the dividend, and it’s based on a price-to-earnings (P/E) multiple of 12 times the firm’s fiscal year 2020 earnings per share (EPS) estimate. The valuation was deemed warranted here as AT&T faces challenging operating trends within its TV business, along with higher leverage and integration risk. That said, the firm sees its negatives offset by higher earnings expectations and faster growth after taking the impact of stock buybacks and cost savings into consideration.

Merrill Lynch covers rival Verizon as the back-up call in telecom. It has a Buy rating on Verizon, but the firm’s $64 price objective is less than 10% raw upside from the $60 or so current share price. Verizon’s 0.8 multiple against the S&P also comes with a slightly higher valuation of 13 times expected 2020 EPS.