Oppenheimer Downgrades AT&T Amid Fiber Expansion Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 20 hours ago
0mins
Source: Yahoo Finance
- Profitability Insight: With a net profit margin of 18.6%, AT&T is recognized as one of the 10 most profitable dividend stocks to invest in now, highlighting its appeal among dividend investors despite facing competitive pressures.
- Rating Downgrade: Oppenheimer analyst Timothy Horan downgraded AT&T from Outperform to Perform, primarily due to concerns over its long-term broadband growth outlook, believing that low Earth orbit satellites will pose a more serious competitive threat.
- Expansion Plans: AT&T aims to add 7 million new fiber passings in 2023, targeting over 60 million locations by 2030, although Oppenheimer fears that actual adoption rates may fall short of expectations, potentially halting expansion at around 50 million homes.
- Investment Commitment: AT&T has committed to investing $19 billion in California's fiber and wireless networks by the end of 2030 to support innovation and economic growth, planning to invest $3 billion more during 2026-2030 than in the previous five years, demonstrating its focus on network modernization.
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Analyst Views on T
Wall Street analysts forecast T stock price to rise
15 Analyst Rating
8 Buy
5 Hold
2 Sell
Moderate Buy
Current: 22.500
Low
20.00
Averages
28.27
High
33.00
Current: 22.500
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.
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- Rating Downgrade: Oppenheimer analyst Timothy Horan downgraded AT&T from Outperform to Perform, primarily due to concerns over its long-term broadband growth outlook, believing that low Earth orbit satellites will pose a more serious competitive threat.
- Expansion Plans: AT&T aims to add 7 million new fiber passings in 2023, targeting over 60 million locations by 2030, although Oppenheimer fears that actual adoption rates may fall short of expectations, potentially halting expansion at around 50 million homes.
- Investment Commitment: AT&T has committed to investing $19 billion in California's fiber and wireless networks by the end of 2030 to support innovation and economic growth, planning to invest $3 billion more during 2026-2030 than in the previous five years, demonstrating its focus on network modernization.
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- Project Scope: The project involves constructing a new four-story, approximately 110,000-square-foot academic facility that will serve the nationally recognized Patterson School of Accountancy, expected to enhance the educational experience and support future program growth.
- Construction Timeline: Work is expected to commence in June 2026, with substantial completion anticipated by December 2028, and the successful execution of this project will further solidify Tutor Perini's market position in educational construction.
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- Rating Downgrade: Oppenheimer analyst Timothy Horan downgraded AT&T from Outperform to Perform, primarily due to concerns over its long-term broadband growth outlook, believing that low Earth orbit satellites will pose a more serious competitive threat.
- Expansion Plans: AT&T aims to add 7 million new fiber passings in 2023, targeting over 60 million locations by 2030, although Oppenheimer fears that actual adoption rates may fall short of expectations, potentially halting expansion at around 50 million homes.
- Investment Commitment: AT&T has committed to investing $19 billion in California's fiber and wireless networks by the end of 2030 to support innovation and economic growth, planning to invest $3 billion more during 2026-2030 than in the previous five years, demonstrating its focus on network modernization.
See More
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- AST SpaceMobile's Market Opportunity: AST SpaceMobile aims to create a satellite network that connects directly to ordinary smartphones, potentially generating up to $6 billion in annual revenue if successful, and has signed agreements with carriers representing over 3 billion subscribers, indicating substantial market potential.
See More
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- Shareholder Return Plan: The company plans to return over $45 billion to shareholders through dividends and share repurchases from 2026 to 2028, demonstrating AT&T's commitment to enhancing shareholder value and building market trust.
- Free Cash Flow Expectations: AT&T anticipates second-quarter free cash flow in the range of $4.0 to $4.5 billion, which reflects the company's ongoing efforts to improve operational efficiency and cash flow management.
- Wireless Service Growth: The company expects year-over-year growth in wireless service revenue for the second quarter, continuing the momentum from the first quarter, indicating a gradual recovery in AT&T's growth capabilities in a competitive market.
See More
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- Financial Guidance Reaffirmed: AT&T reiterates its 2026 and multi-year financial and operational guidance, expecting to return over $45 billion to shareholders through dividends and share repurchases from 2026 to 2028, thereby enhancing investor confidence.
- Wireless Revenue Growth: The company anticipates year-over-year growth in wireless service revenue for Q2 2026, indicating sustained growth potential in a competitive market, particularly with strong performance in converged offers.
- Free Cash Flow Expectations: AT&T expects its second-quarter free cash flow to range between $4.0 billion and $4.5 billion, which will support the company's long-term investments and shareholder returns.
- Debt Management Goals: The company expects its net debt-to-adjusted EBITDA ratio to return to the target level of 2.5x within three years following the closing of its transaction with EchoStar, demonstrating its commitment to financial stability.
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