Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 11 Feb, 25 | T | Buy | USD 24.86 | USD 26.04 | USD 28.0 | 7 days | 12.6% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
AT&T Inc. provides telecommunications and technology services worldwide. The company operates through two segments, Communications and Latin America. The Communications segment offers wireless voice and data communications services; and sells handsets, wireless data cards, wireless computing devices, and carrying cases and hands-free devices through its own company-owned stores, agents, and third-party retail stores. It also provides Virtual Private Networks, AT&T Dedicated Internet, Ethernet, data services, security, cloud solutions, outsourcing, and managed and professional services, as well as customer premises equipment for multinational corporations, small and mid-sized businesses, governmental, and wholesale customers. In addition, this segment offers broadband services, including fiber connections and legacy telephony voice communication services to residential customers. This segment markets its communications services and products under the AT&T, Cricket, AT&T PREPAID, and AT&T Fiber brand names. The Latin America segment provides postpaid and prepaid wireless services in Mexico under the AT&T and Unefon brand names, as well as sells smartphones through its owned stores, agents and third-party retail stores. The company was formerly known as SBC Communications Inc. and changed its name to AT&T Inc. in 2005. AT&T Inc. was incorporated in 1983 and is based in Dallas, Texas.
Increased Free Cash Flow: The company reported $17.6 billion in free cash flow for 2024, reflecting an increase of $0.9 billion year over year, which supports future investments and shareholder returns.
Strong Subscriber Growth: AT&T added 1.7 million postpaid phone subscribers in 2024, with an industry-leading postpaid phone churn rate of 0.76%, indicating strong customer retention.
Weak Business Wireline Performance: Business Wireline EBITDA declined, and AT&T expects a mid-teens percentage decline in 2025, indicating continued challenges in this segment.
Decline in Net Income: AT&T’s net income decreased from $15.6 billion in 2023 to $12.3 billion in 2024, marking a 21.2% decline, primarily due to higher operating expenses and non-cash goodwill impairment.
AT&T faces key investment risks including declining Business Wireline revenues, high debt levels, competitive pressures in the telecom industry, and potential execution risks in its fiber and 5G expansion strategy.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 24.86 | 21.5 | 26.04 | 28.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
AT&T Reports Strong Fourth-Quarter and Full-Year 2024 Results
AT&T Inc. (NYSE: T) announced robust financial and operational performance for the fourth quarter and full-year 2024, reflecting solid momentum in its 5G and fiber subscriber growth. The company met all consolidated financial guidance for 2024 and reaffirmed its outlook for 2025, as presented at its recent Analyst & Investor Day. Chief Executive Officer John Stankey emphasized that the company's disciplined execution over the past four years has positioned AT&T for sustained growth. He also highlighted plans to expand the nation’s largest fiber network, modernize its wireless infrastructure, and initiate share repurchases in the second half of 2025.
Fourth-Quarter Performance Highlights
For the fourth quarter, AT&T reported revenues of $32.3 billion, reflecting a 0.9% increase year over year, driven by higher Mobility service and Consumer Wireline revenues. The company achieved a diluted earnings per share (EPS) of $0.56 and an adjusted EPS of $0.54. Operating income stood at $5.3 billion, with adjusted operating income reaching $5.4 billion. Net income was $4.4 billion, while adjusted EBITDA totaled $10.8 billion. AT&T also reported $11.9 billion in cash from operating activities, marking an increase of $0.5 billion compared to the previous year. Capital expenditures amounted to $6.8 billion, while capital investment reached $7.1 billion. Free cash flow for the quarter was $4.8 billion, reflecting a year-over-year decline of $1.5 billion due to the company’s efforts to establish a more consistent quarterly cash flow cadence.
Subscriber and Revenue Growth in Key Segments
AT&T continued to demonstrate strength in subscriber additions and revenue growth across key business segments. The company reported 482,000 postpaid phone net additions, with an industry-leading postpaid phone churn rate of 0.85%. Mobility service revenues rose by 3.3% year over year to $16.6 billion. AT&T Fiber maintained its positive trajectory with 307,000 net additions, marking the 20th consecutive quarter with at least 200,000 net additions. Consumer broadband revenues also experienced a strong increase, rising by 7.8% to $2.9 billion.
Full-Year 2024 Financial Results
For the full year, AT&T reported total revenues of $122.3 billion, with a diluted EPS of $1.49 and an adjusted EPS of $2.26. Operating income stood at $19.0 billion, while adjusted operating income reached $24.2 billion. The company’s net income for the year was $12.3 billion, with adjusted EBITDA of $44.8 billion. Cash from operating activities increased to $38.8 billion, up $0.5 billion year over year. AT&T’s total capital expenditures for 2024 were $20.3 billion, while capital investment stood at $22.1 billion. Free cash flow improved to $17.6 billion, reflecting a year-over-year increase of $0.9 billion.
2025 Financial and Operational Outlook
Looking ahead to 2025, AT&T expects consolidated service revenue growth in the low-single-digit range, with Mobility service revenue growth projected at the higher end of 2% to 3%. Consumer fiber broadband revenue is anticipated to grow in the mid-teens, while adjusted EBITDA is expected to increase by at least 3%. The company projects Mobility EBITDA growth at the higher end of the 3% to 4% range, while Business Wireline EBITDA is expected to decline in the mid-teens range. Consumer Wireline EBITDA is forecasted to grow in the high-single to low-double-digit range. AT&T plans to maintain capital investment at approximately $22 billion and expects free cash flow, excluding DIRECTV, to exceed $16 billion. Adjusted EPS, excluding DIRECTV, is projected to range between $1.97 and $2.07. Additionally, AT&T aims to achieve a net-debt-to-adjusted EBITDA ratio of 2.5x in the first half of 2025.
Continued Strategic Investments and Debt Management
AT&T remains committed to strategic investments in network expansion and modernization efforts. The company continues to enhance its fiber infrastructure and implement Open RAN technology to improve wireless network efficiency. Operating expenses for the year increased to $103.3 billion, primarily due to non-cash goodwill impairment and ongoing network transformation initiatives. AT&T also reported a decline in net income attributable to common stock, which stood at $10.7 billion compared to $14.2 billion in the previous year. Total debt at the end of 2024 amounted to $123.5 billion, with net debt reported at $120.1 billion. The company remains focused on reducing debt and optimizing financial performance through operational efficiencies and disciplined capital management.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on AT&T Inc. (NYSE: T) at the closing price of USD 24.86, as on February 10, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Communication Services Industry: Telecom Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| T AT&T Inc |
-1.925 6.73% | 26.68 | - | 6.67 | 0.96 | 1.13 | 2.18 | 14.08 |
| TMUS T-Mobile US Inc |
-18.88 7.05% | 249.01 | 22.58 | 17.86 | 2.42 | 2.94 | 3.79 | 10.97 |
| VZ Verizon Communications Inc |
-2.595 5.69% | 43.02 | 7.54 | 8.04 | 1.17 | 1.60 | 2.42 | 6.50 |
| CMCSA Comcast Corp |
-1.955 5.47% | 33.77 | 10.53 | 9.77 | 1.21 | 1.93 | 2.09 | 6.83 |
| DTEGY Deutsche Telekom AG ADR |
-1.89 5.04% | 35.62 | 17.86 | 11.56 | 1.03 | 1.73 | 2.35 | 6.01 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 10,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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