Wells Fargo Initiates Underweight Rating on AT&T Amid Fiber Growth Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 12 hours ago
0mins
Source: seekingalpha
- Rating Downgrade: Wells Fargo initiated coverage of AT&T (T) with an Underweight rating, as analyst Steven Cahall noted that the telecom's fiber growth may not sufficiently counteract the rising wireless competition from satellite connectivity.
- Price Target Set: Cahall set a price target of $18 per share, indicating approximately a 15% downside from AT&T's last close at $21.09, reflecting a cautious market outlook on the company's future performance.
- Fiber Business Outlook: Despite challenges, Cahall forecasts that AT&T's fiber revenue will rise to 14% of total revenue by 2032 from 8% in 2026, with fiber locations served increasing from 21 million in 2023 to 54 million, showcasing significant growth potential.
- Competition Risk Warning: Cahall warned that customers outside AT&T's fiber footprint remain vulnerable to competition, particularly as satellite services pressure the fixed wireless access (FWA) industry, putting AT&T at risk for net add and prepaid account share losses.
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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: 21.090
Low
20.00
Averages
28.27
High
33.00
Current: 21.090
Low
20.00
Averages
28.27
High
33.00
About T
AT&T Inc. is a provider of telecommunications and technology services. The Company's segments include Advanced Connectivity, Legacy and Latin America. The Advanced Connectivity segment provides domestic fifth generation (5G) and fiber-based wireless, internet and other advanced connectivity services to consumer and business customers. The Legacy segment provides domestic legacy voice and data services to consumer and business customers over our copper-based network. The Latin America segment provides wireless service and equipment in Mexico. Its plans and services include AT&T Fiber, AT&T Points Plus Card, AT&T Wireless and AT&T Fiber. Its phone plans include Elite 2.0, Premium 2.0, Extra 2.0, and Value 2.0. Its home internet solutions include AT&T Fiber and AT&T Internet Air. It offers phones, tablets, and smartwatches. The Company also offers accessories such as cases, chargers, screen protectors, and headphones.
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.
Wells Fargo Initiates Underweight Rating on AT&T Amid Fiber Growth Concerns
- Rating Downgrade: Wells Fargo initiated coverage of AT&T (T) with an Underweight rating, as analyst Steven Cahall noted that the telecom's fiber growth may not sufficiently counteract the rising wireless competition from satellite connectivity.
- Price Target Set: Cahall set a price target of $18 per share, indicating approximately a 15% downside from AT&T's last close at $21.09, reflecting a cautious market outlook on the company's future performance.
- Fiber Business Outlook: Despite challenges, Cahall forecasts that AT&T's fiber revenue will rise to 14% of total revenue by 2032 from 8% in 2026, with fiber locations served increasing from 21 million in 2023 to 54 million, showcasing significant growth potential.
- Competition Risk Warning: Cahall warned that customers outside AT&T's fiber footprint remain vulnerable to competition, particularly as satellite services pressure the fixed wireless access (FWA) industry, putting AT&T at risk for net add and prepaid account share losses.
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- Intensified Market Competition: Analyst Steven Cahall noted that Starlink's near-term growth potential in broadband and long-term disruptive capability in wireless will put AT&T under significant competitive pressure, especially outside its fiber footprint.
- Stock Price Decline: AT&T's shares have already fallen 15% year-to-date in 2026 due to various headwinds, including high infrastructure costs and the commoditization of telecommunications services, raising investor concerns about its growth prospects.
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- Rating Downgrade: Wells Fargo initiated coverage of AT&T (T) with an Underweight rating, as analyst Steven Cahall noted that the telecom's fiber growth may not sufficiently counteract the rising wireless competition from satellite connectivity.
- Price Target Set: Cahall set a price target of $18 per share, indicating approximately a 15% downside from AT&T's last close at $21.09, reflecting a cautious market outlook on the company's future performance.
- Fiber Business Outlook: Despite challenges, Cahall forecasts that AT&T's fiber revenue will rise to 14% of total revenue by 2032 from 8% in 2026, with fiber locations served increasing from 21 million in 2023 to 54 million, showcasing significant growth potential.
- Competition Risk Warning: Cahall warned that customers outside AT&T's fiber footprint remain vulnerable to competition, particularly as satellite services pressure the fixed wireless access (FWA) industry, putting AT&T at risk for net add and prepaid account share losses.
See More
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- Price Fluctuation Analysis: JMOM's 52-week low is $63.29 and high is $85.64, with the last trade at $82.78, indicating price volatility near the high point, which may influence investor buying decisions.
- Technical Analysis Tool: Comparing the current stock price to the 200-day moving average can provide valuable insights for investors, helping to assess market trends and potential buying opportunities.
- ETF Trading Mechanism: Exchange-traded funds (ETFs) trade in 'units' rather than traditional shares, allowing for flexibility in responding to market demand, as these units can be created or destroyed.
- Liquidity Monitoring: Weekly monitoring of changes in shares outstanding for ETFs highlights significant inflows or outflows, where inflows necessitate purchasing underlying assets, while outflows may lead to selling, impacting the performance of individual stocks within the ETF.
See More
Market Turbulence and Corporate Developments to Watch
- Market Sell-off: Dow futures are down 400 points, with S&P and Nasdaq futures also sharply lower, reflecting investor anxiety over escalating tensions in Iran, which could impact short-term trading strategies and overall market sentiment.
- Apple's Chip Investment: Apple has announced a chip supply deal with Broadcom worth over $30 billion, expected to produce 15 million American-made chips, marking its largest U.S. manufacturing commitment to date, which will enhance supply chain stability and technological independence.
- Analyst Rating Changes: Old Dominion Freight Line was upgraded to buy from hold by Wells Fargo, as analysts see a rebound in the freight cycle; despite concerns that much of this optimism is already priced in, they recommend maintaining a positive outlook on the stock.
- AT&T's Outlook Concerns: Wells Fargo initiated coverage of AT&T with a sell rating and a price target of $18, indicating nearly 15% downside, as analysts worry about competition from SpaceX's Starlink in broadband internet, which may lead to further stock declines and reflects market skepticism about its growth prospects.
See More
Latest Wall Street Ratings Overview
- Viking Holdings Rating: BMO initiates coverage of Viking Holdings (VIK) with an Outperform rating and a $115 target price, indicating confidence in the company's future growth despite its high valuation.
- Apple's Sustained Growth: Bernstein reiterates Apple as Outperform, noting a 2% YoY increase in May iPhone sales, with nearly all markets showing positive growth, particularly in Japan and emerging markets, highlighting Apple's competitive strength globally.
- Optimistic Tesla Outlook: Goldman Sachs maintains a neutral rating on Tesla, anticipating that the upcoming earnings report will exceed market expectations, supported by strong second-quarter delivery numbers, reflecting the company's ongoing appeal in the electric vehicle market.
- Pinterest Engagement Growth: DA Davidson initiates a Buy rating on Pinterest with a $26 price target, emphasizing the company's consistent growth in user engagement over the past ten quarters, showcasing its strong performance in the social media sector.
See More
AT&T Faces Competitive Pressure from SpaceX's Starlink
- Downgrade Initiated: Wells Fargo initiated coverage of AT&T with an underweight rating and set a price target of $18, indicating nearly a 15% downside from Tuesday's close, reflecting a pessimistic outlook on the company's future performance.
- Intensified Market Competition: Analyst Steven Cahall noted that Starlink's near-term growth potential in broadband and long-term disruptive capability in wireless will put AT&T under significant competitive pressure, especially outside its fiber footprint.
- Stock Price Decline: AT&T's shares have already fallen 15% year-to-date in 2026 due to various headwinds, including high infrastructure costs and the commoditization of telecommunications services, raising investor concerns about its growth prospects.
- Limited Partnership Opportunities: The likelihood of AT&T forming a mobile virtual network operator partnership with Starlink is low, meaning the company must excel in fiber and convergence services to generate upside for its shares.
See More
Ericsson and AT&T Complete North America's First Low-Latency Mobility Trial
- Low-Latency Mobility Technology: Ericsson, in collaboration with AT&T and MediaTek, has completed North America's first low-latency mobility trial on the AT&T network, utilizing Layer 1/Layer 2 technology to reduce data interruption time by 25%, significantly enhancing user connectivity experience while on the move, which is crucial for real-time applications.
- Support for Real-Time Applications: By minimizing interruptions during cell handovers, the LTM technology provides more reliable support for extended reality (XR/VR) and cloud applications, ensuring a smooth experience for users engaged in immersive video conferencing and mission-critical operations, thereby reducing churn and negative sentiment.
- Foundation for AI-Driven Applications: The implementation of LTM not only improves mobility determinism but also establishes a network foundation for AI-driven applications, ensuring that emerging AI workloads such as real-time XR scene reconstruction and industrial automation can continuously exchange data with low latency and jitter as devices move.
- Industry Collaboration Outcomes: This trial highlights Ericsson's significant contributions to standardization within 3GPP, demonstrating that LTM technology can enhance the consistency and reliability of device connections, providing essential support for Critical IoT and advanced consumer experiences, thus driving the industry towards more efficient connectivity services.
See More
