AT&T Acquires Lumen's Fiber Business for $5.75 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Acquisition Scale: AT&T agreed to acquire Lumen's fiber business for $5.75 billion last year, which is expected to add 4 million passed locations and 1 million subscribers, significantly expanding its fiber network and enhancing market competitiveness.
- Integration Cost Impact: AT&T anticipates a $0.05 reduction in adjusted earnings per share in 2026 due to integration costs and additional interest expenses, indicating short-term financial pressure but substantial long-term revenue potential.
- Customer Penetration Opportunity: With Lumen's customer penetration rate at 25%, AT&T has the potential to add approximately 600,000 new customers by improving penetration, further solidifying its market position.
- Cash Flow Growth Outlook: Despite high initial costs, AT&T expects free cash flow to reach at least $21 billion by 2028, demonstrating the strategic value of the Lumen acquisition for long-term growth.
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Analyst Views on T
Wall Street analysts forecast T stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for T is 28.27 USD with a low forecast of 20.00 USD and a high forecast of 33.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
8 Buy
5 Hold
2 Sell
Moderate Buy
Current: 24.070
Low
20.00
Averages
28.27
High
33.00
Current: 24.070
Low
20.00
Averages
28.27
High
33.00
About T
AT&T Inc. is a holding company. The Company is a provider of telecommunications and technology services globally. The Company’s segments include Communications and Latin America. The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the United States and businesses globally. The business units of the Communication segment include Mobility, Business Wireline, and Consumer Wireline. Mobility provides nationwide wireless service and equipment. Business Wireline provides advanced Ethernet-based fiber services, Internet Protocol (IP) Voice and managed professional services, as well as legacy voice and data services and related equipment, to business customers. Consumer Wireline provides broadband services, including fiber connections. Consumer Wireline provides legacy telephony voice communication services. The Latin America segment provides wireless services and equipment in Mexico.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AT&T Acquires Lumen's Fiber Business for $5.75 Billion
- Acquisition Scale: AT&T agreed to acquire Lumen's fiber business for $5.75 billion last year, which is expected to add 4 million passed locations and 1 million subscribers, significantly expanding its fiber network and enhancing market competitiveness.
- Integration Cost Impact: AT&T anticipates a $0.05 reduction in adjusted earnings per share in 2026 due to integration costs and additional interest expenses, indicating short-term financial pressure but substantial long-term revenue potential.
- Customer Penetration Opportunity: With Lumen's customer penetration rate at 25%, AT&T has the potential to add approximately 600,000 new customers by improving penetration, further solidifying its market position.
- Cash Flow Growth Outlook: Despite high initial costs, AT&T expects free cash flow to reach at least $21 billion by 2028, demonstrating the strategic value of the Lumen acquisition for long-term growth.
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