AT&T (NYSE: T) has received a revised price target from TD Cowen, with the firm increasing its target to $26.00 from the previous $23.00, while maintaining a Hold rating on the stock.
The adjustment follows AT&T's third-quarter 2024 earnings report, which presented mixed results.
The telecom giant reported third-quarter numbers that matched expectations, but there were some areas that fell short. Notably, the company saw a miss in equipment revenue due to fewer customer upgrades and slightly lower phone additions than anticipated. However, AT&T did outperform in average revenue per user (ARPU), a key industry metric.
AT&T's financials were bolstered by strong free cash flow (FCF), but the report indicated a lower number of fiber additions and reduced guidance for the Business Wireline segment.
Looking ahead, the firm noted potential challenges in achieving free cash flow growth for the year 2025, primarily because of the uncertain future of the DIRECTV stream service.
In other recent news, AT&T has been the subject of positive attention from Oppenheimer, which has raised its price target for the company to $24, maintaining an Outperform rating. This decision was influenced by AT&T's strong quarterly performance, noteworthy broadband subscriber growth, and progress in reducing debt. The firm also noted AT&T's potential to meet its 2024 guidance, citing limited competition and substantial network infrastructure investments.
In the third quarter of 2024, AT&T reported solid financial results with significant growth in high-value wireless and broadband subscribers. The company added 403,000 postpaid phone subscribers and witnessed a 6% EBITDA growth in its Mobility segment. AT&T's total revenues stood at $29 billion, with capital expenditures increasing to $5.3 billion, signaling the company's commitment to wireless network modernization.
InvestingPro Insights
AT&T's recent performance and TD Cowen's revised price target are complemented by several key insights from InvestingPro. The company's P/E ratio (adjusted) of 12.42 for the last twelve months as of Q3 2024 suggests it's trading at a relatively low valuation compared to its earnings. This aligns with one of the InvestingPro Tips, which notes that AT&T is "Trading at a low P/E ratio relative to near-term earnings growth."
Additionally, AT&T's dividend yield stands at an attractive 4.94%, supporting its reputation as a strong dividend player. This is further reinforced by an InvestingPro Tip highlighting that AT&T "Has maintained dividend payments for 41 consecutive years," which may appeal to income-focused investors despite TD Cowen's preference for Verizon (NYSE:VZ)'s yield.
The company's recent stock performance has been noteworthy, with a 53.77% total return over the past year and a 37.53% return over the last six months. This strong momentum is reflected in the InvestingPro Tip stating that AT&T is "Trading near 52-week high," with the current price at 99.6% of its 52-week high.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for AT&T, providing a deeper understanding of the company's financial health and market position.
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