Citi analysts led by Michael Rollins are upbeat on AT&T's revenue growth, Ebitda growth, and free-cash-flow generation.
Inflation has been quite a thorn in the side of retirees or semi-retirees who depend on a fixed income.
I previously rated AT&T a strong buy due to their disciplined strategy, industry tailwinds, and a DCF price target of $26, indicating 46% upside. AT&T's strategic focus on core businesses, including the DirectTV sale, positions them well for the bundling trend, but recent price gains lower potential returns. I reaffirm my DCF price target of $26 but downgrade AT&T to a buy due to reduced margin of safety and potential return.
AT&T's return to being a telecom after the Warner spin-off was an important step, but it's not over yet. AT&T's $130B debt and competition in telecom and ISP markets limit flexibility and growth potential, despite strong market share. Dividend growth is possible with a low payout ratio and buybacks, but debt repayment and reinvestment needs constrain significant increases.
AT&T Inc (T, Financial) shares are currently priced at $21.87, reflecting a modest decline of 0.21%. This minor movement in the stock price is a typical fluctuation within the broader context of AT&T's recent strategic decisions and market dynamics.
I have been bullish on T since late 2023. T recently decided to divest its DirecTV segment. This move creates another potent positive catalyst for my bull thesis.
Earnings later this month will be a crucial day for determining if AT&T Inc. stock's rally continues. Strong free cash flow is key to ensuring dividend security, and could there be a raise in store? With a sub-50% payout ratio expected, with strategic moves in the works, the company's significant debt burden is in focus.
The telecom giant will sell its 70% stake in DIRECTV, marking the end of a painful and costly era.
Concerns about the sustainability of the company's dividend are fading fast.
We previously shifted our stance on AT&T to neutral due to a balanced risk-reward. The sale of DirecTV, despite a significant loss, aids AT&T's deleveraging and refocuses on its core business. AT&T offers an attractive earnings yield of 10% and free cash flow yield of 12%, but faces bigger risks in 2025.
AT&T (NYSE:T) is exciting the entertainment business and selling its remaining 30% stake in DirectTV to Dallas based private equity group TPG.