AT&T (T) is an American telecommunication, media, and technology company that specializes in wireless communication, internet services, telephone services, and more. It serves individual customers as well as businesses and government organizations.
About AT&T Stock
Based in Dallas, Texas, it is valued at $163 billion by market capitalization and is trading just below its 52-week high of $24. AT&T has seen a steady rise this year, up more than 36% in the year to date and outperforming the S&P 500 Index ($SPX). It has also kept pace with the SPDR S&P Telecom ETF (XTL), which is also up just shy of 37%.
Despite losing the Dividend Aristocrat title in 2022, when it cut its dividend and spun off its WarnerMedia business to deal with its rising debt load, T stock still provides a solid 4.8% yield. This payout is backed by stable earnings and strong free cash flow (FCF).
T Stock Receives a Fresh Rating
Financial giant Morgan Stanley has initiated coverage of AT&T with an “Overweight” rating while giving it a price target of $28, suggesting upside potential of 22% from its current trading price. The analyst cites growth as a major driving force for outperformance along with its product leadership in fiber.
"We see the most compelling risk/reward in AT&T with 18% upside to our $28 price target and 40% upside to our bull case against just 10% downside to our bear case," said MS analysts on Dec. 16.
AT&T Reports Third-Quarter Results
AT&T posted its latest quarterly results back on Oct. 23. The telecom company reported revenue of $30.2 billion, slightly below analysts’ estimated $30.55 billion. The company reported a loss of $174 million for the quarter with adjusted EPS of $0.60 per share. This came in slightly higher against analysts’ consensus estimate of $0.59.
EBITDA for the quarter came in at $11.6 billion, and the company ended the third quarter with a cash balance of $2.59 billion.
Lastly, management has reiterated its full-year earnings guidance in the range of $2.15 to $2.25 per share.
What Do Analysts Think About T?
Analysts have a consensus “Moderate Buy” rating on the stock with a mean price target of $26.10, pointing toward upside of 13.67%. The stock’s forward price-earnings ratio of 10.3x and forward price-cash flow ratio of 4.51x indicate that the stock is undervalued at the moment.
A total of 27 analysts are covering the stock with 14 “Strong Buy” ratings, 2 “Moderate Buy” ratings, 10 “Hold” ratings, and 1 “Strong Sell” rating.
