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%.
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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.
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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.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart
