AT&T (T) Stock Forecast & Price Target

AT&T's wireless business, which comprises nearly 70% of its revenue, reported a segment EBITDA increase of 2.2% year-over-year, reaching $9.7 billion, primarily driven by cost efficiencies despite rising acquisition costs. The company's service revenue also demonstrated a positive trend, increasing 2.3% year-over-year to $16.9 billion, supported by a 2.1% growth in postpaid phone subscribers and strong broadband revenue growth of 8.2%, bolstered by a 17% rise in fiber revenue. Furthermore, the company anticipates accelerated fiber deployment and increased postpaid phone net additions in the upcoming fiscal years, projecting a service revenue growth of approximately 3%, reinforcing a favorable outlook for AT&T's financial performance.

AT&T's outlook is negatively influenced by its wireless business, which generates nearly 70% of revenue, showing a quarterly mobility revenue decline of approximately 1% and a revised lower growth projection for wireless service revenue at 2.1% amidst decreasing average revenue per user (ARPU). Additionally, the Legacy segment is projected to create a significant EBITDA growth headwind, with expectations of turning negative beyond 2027 due to the discontinuation of copper-based products and network shutdowns. Overall financial risks are exacerbated by competitive pressures from other wireless and cable operators, potential economic downturns, and challenges in achieving cost-cutting and margin expansion initiatives.