AT&T Expected to Rise on Strong Phone Net Additions and Robust Guidance: Analyst

Goldman Sachs analyst James Schneider reiterated a Buy rating on AT&T Inc (NYSE:T) with a price target of $22.

AT&T reported fiscal 2024 second-quarter revenue of $29.8 billion — just below Goldman Sachs’s and the Stret’s estimate of $30 billion.

• Adjusted EBITDA of $11.34 billion was in line with Goldman Sachs’s estimate of $11.37 billion and the Street’s estimate of $11.31 billion.  
• Free cash flow of $4.6 billion was above Goldman Sachs’s estimate at $4.3 billion and the Street at $4.3 billion on lower capital investment.
• Wireless service revenue of $16.3 billion was in line with Goldman Sachs’s estimate at $16.2 billion, and the Street at $16.2 billion.
• Postpaid phone net adds came in at over 419,000, which was well ahead of Goldman Sachs at more than 275,000 and the Street at more than 266,000.
• Wireless EBITDA of $9.20 billion was in line with Goldman Sachs’s estimate at $9.29 billion and the Street at $9.18 billion.
• Fiber net additions of 239,000-plus were below Goldman Sachs’s at +260k and the Street’s at more than 255,000.
• Wireless service revenue growth stands at +3% versus Goldman Sachs’s estimate of +3.2% and the Street at +3.1%.
• Adjusted EPS remains at $2.15-$2.25 versus Goldman Sachs’s estimate at $2.24 and the Street at $2.20.

Schneider expects the stock to trade modestly higher following results given more robust phone net additions, in light of lowered expectations following a Verizon Communications Inc (NYSE:VZ) report.

Price Action: AT&T stock gained 27% in the last 12 months. Investors can gain exposure to the stock through Vanguard High Dividend Yield ETF (NYSE:VYM) and Vanguard Value ETF (NYSE:VTV). T shares traded higher by 4.26% at $18.98 at the last check on Wednesday.

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