AT&T Is 'Largely Solid' Judging From Q3 Beat, But Analysts Are Concerned: Here's Why

AT&T Inc. T released upbeat third-quarter results on Thursday with an increase in wireless subscribers.

RBC Capital Markets

Analyst Kutgun Maral reiterated a Sector Perform rating, while reducing the price target from $20 to $18.

AT&T’s quarterly results were “largely solid, with upside to wireless/fiber net adds, revenue, and a broad-based EBITDA beat, and management commentary suggests operating and financial momentum should continue into 4Q22 as it looks to meet or beat its full-year targets,” Maral said.

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There is limited visibility due to macro pressures and downside risk to AT&T’s prior outlook for 2023, which investors understand will need to be “reset at the year-end print.”

“We look forward to the removal of that overhang, and in the meantime are encouraged that there are no new negatives to pick at,” he added.

KeyBanc Capital Markets

Analyst Brandon Nispel maintained a Sector Weight rating.

The third-quarter beat was “aided by the classic AT&T one-time items and accounting changes,” and the company has “significant investment in front of it in 5G and Fiber to grow sustainably,” Nispel wrote.

“AT&T continues to lose overall broadband subs but seems to indicate an out-of-footprint FTTH expansion,” he added.

Raymond James

Analyst Frank Louthan reaffirmed an Outperform rating, while reducing the price target from $26 to $24.

“The current strategy is driving better than anticipated results, and we believe the street should recognize this,” Louthan said. “Additionally, the misperception regarding the health of the business from the Q2 call appears to be put to rest with the company showing strong results and indicating consumer demand is unchanged."

T Price Action: Shares of AT&T had risen by 0.48% to $16.82 at the time of publication Friday.

See Also: AT&T Stock Surges After Q3 Print