Wells Fargo analyst Eric Luebchow maintained a Buy rating on AT&T (T – Research Report) yesterday and set a price target of $20.00.
Eric Luebchow’s Buy rating for AT&T’s stock hinges on a few critical observations that suggest underlying strength despite a recent rocky earnings guide. The lower-than-expected earnings per share (EPS) guidance was mainly due to non-cash items which, while initially alarming to investors, didn’t reflect the company’s operational performance. Key performance indicators such as subscriber gains, EBITDA, and free cash flow (FCF) met or exceeded expectations, providing a solid foundation for the stock’s potential recovery. Moreover, when adjusted for the non-cash items, the EPS aligns more closely with expectations, underscoring that the initial guidance may not fully represent the company’s earnings potential.
The report also points to AT&T’s core wireless business, which continues to see growth with significant postpaid phone customer additions and expected revenue growth from service increases. The efficiency measures being implemented are anticipated to yield even higher wireless EBITDA growth. Furthermore, AT&T’s broadband segment is delivering growth above expectations, propelled by an increase in fiber customers and revenue per user. The FCF guidance remains in line with expectations and is projected to grow as the company benefits from capital efficiencies and strategic debt reduction. The analysis concludes that AT&T’s valuation is attractive, and current weaknesses in stock price present a buying opportunity, considering the company’s long-term growth prospects and favorable financial outlook.
In another report released today, Oppenheimer also maintained a Buy rating on the stock with a $21.00 price target.
T’s price has also changed moderately for the past six months – from $14.950 to $16.680, which is a 11.57% increase.
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AT&T (T) Company Description:
AT&T, Inc. is a holding company, which engages in the provision of telecommunications media and technology service. It operates through the following segments: Communications, WarnerMedia, Latin America and Xandr. The Communications segment provides services to businesses and consumers located in the U.S., or in U.S. territories, and businesses globally. The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content over various physical and digital formats. The Latin America segment provides entertainment and wireless services outside of the U.S. The Xandar segment provides advertising services. The company was founded in 1983 and is headquartered in Dallas, TX.
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