AT&T's 5G, Broadband Growth Strategies Lead Analyst To Bullish Outlook

AT&T Inc T recently reported mixed results for its fourth quarter, amid stiff competition from Verizon Communications Inc. VZ.

The company’s execution in the wireless and broadband businesses has been consistent, and both segments seem to be poised for strong long-term growth, according to JPMorgan.

The AT&T Analyst: Richard Choe upgraded the rating for AT&T from Neutral to Overweight, while raising the price target from $18 to $21.

The AT&T Thesis: The company’s broadband business is likely to be supported by its ongoing fiber build, “along with incremental opportunities in and out of existing markets,” Choe said in the upgrade note.

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AT&T’s mobility base has stabilized with the company’s consistent promotions and the rolling out of “mid-band 5G service to 210m pops,” the analyst stated. He estimates 1.375 million postpaid phone adds in 2024 and expects AT&T to grow its postpaid phone base by 1.9%.

“We look for ARPU growth of 1.3% for 2024 and phone service revenue to be up 3.5%,” Choe further wrote.

When it comes to the overall viewpoint of Wall Street analysts, AT&T has a consensus Outperform rating, given the history of coverage over the past three months. Kannan Venkateshwar from Barclays in AT&T is the most optimistic, expecting a 17.65% rise in the stock in the coming year.

In the past 3 months, AT&T rose 13.17%, which indicates that opinions improved on the business and how attractive it is to own based on either its stock price, or underlying fundamentals, like revenue, which rose 2.17% over the past year.

T Price Action: Shares of AT&T were up 2% to $18.06 at the time of publication Thursday.

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