AT&T: Scotiabank Downgrades to Sector Perform from Sector Outperform

AT&T: Scotiabank Downgrades to Sector Perform from Sector Outperform

In a significant move, Scotiabank has downgraded AT&T Inc. (T) from "Sector Outperform" to "Sector Perform." This adjustment comes ahead of AT&T's expected fiscal third-quarter earnings report for 2025, scheduled to be announced on Wednesday, October 22.

Analysts at Scotiabank expect AT&T to report a profit of $0.54 per share on a diluted basis, a 10% decrease from the $0.60 per share reported in the year-ago quarter. Despite this expected decline, AT&T has shown resilience, beating the consensus estimates in three of the last four quarters, although it missed the forecast in one quarter What to Expect From AT&T's Q3 2025 Earnings Report^[1].

For the full year, analysts anticipate AT&T to report EPS of $2.05, a 9.3% decrease from the $2.26 reported in fiscal 2024. However, the company is expected to see a 10.2% year-over-year increase in EPS to $2.26 in fiscal 2026 What to Expect From AT&T's Q3 2025 Earnings Report^[1].

AT&T's stock has outperformed the S&P 500 Index ($SPX) over the past 52 weeks, with shares up 22.7% compared to the index's 17.8% gain. However, it underperformed the Communication Services Select Sector SPDR ETF (XLC), which saw a 29.5% uptick during the same period What to Expect From AT&T's Q3 2025 Earnings Report^[1].

The downgrade by Scotiabank follows a series of strategic investments by AT&T in 5G and fiber infrastructure, aimed at enhancing its services and driving long-term growth. The company's customer-focused approach and robust postpaid wireless growth have been key drivers of its performance What to Expect From AT&T's Q3 2025 Earnings Report^[1].

On July 23, AT&T shares closed up more than 1% after reporting its Q2 results, with adjusted EPS of $0.54 beating Wall Street expectations of $0.51. The company's revenue for the quarter was $30.8 billion, surpassing Wall Street forecasts of $30.5 billion. AT&T expects full-year adjusted EPS in the range of $1.97 to $2.07 What to Expect From AT&T's Q3 2025 Earnings Report^[1].

Despite the downgrade, the overall consensus on AT&T stock remains reasonably bullish, with a "Moderate Buy" rating. Out of 29 analysts covering the stock, 16 advise a "Strong Buy," three suggest a "Moderate Buy," nine give a "Hold," and one recommends a "Strong Sell." The average analyst price target is $30.57, indicating a potential upside of 13% from current levels What to Expect From AT&T's Q3 2025 Earnings Report^[1].