AT&T Stock Analysts' Price Targets: A Comprehensive Analysis

AT&T reported Q2 revenue of $30.8 billion, up 3.5% YoY, and added 401,000 postpaid wireless subscribers and 243,000 fiber customers. Analysts expect adjusted EPS to decline 9.7% YoY to $2.04 for FY25. The consensus rating is a "Moderate Buy" with 17 "Strong Buy" ratings, three "Moderate Buys," seven "Holds," and one "Strong Sell." The mean price target is $30.36, implying a 10.8% premium to current price levels.

AT&T reported its Q2 financial results on July 23, showcasing a mix of strong and moderate performance across its business segments. The company's revenue reached $30.8 billion, marking a 3.5% year-over-year (YoY) increase. Despite this growth, the company's stock experienced a slight decline, reflecting a more nuanced performance.

Wireless Strength and Subscriber Growth

AT&T added 401,000 net postpaid phone subscribers in Q2, easily surpassing analysts' expectations of 296,000. This robust subscriber growth was driven by strong demand for devices and bundled wireless offerings, with mobility service revenue rising by 6.7% to $16.9 billion. However, the company noted a slight increase in postpaid phone churn, which rose to 0.87% year-over-year, up by 17 basis points. AT&T attributed this uptick to customers coming off device financing contracts, indicating a minor impact that was "a little bit more ... than anticipated" [1].

Mixed Performance in Broadband

On the broadband side, AT&T added 243,000 net fiber subscribers in Q2, falling short of the projected 250,600 and marking a sequential decline from the 261,000 added in Q1. This underperformance in fiber additions contributed to a dip in the stock despite overall solid results. The company reaffirmed its aggressive fiber expansion goals, stating it will allocate $3.5 billion to reach 4 million new locations per year, aiming to pass 50 million customer locations with in-region fiber by 2030 [1].

Investment and Long-term Strategy

AT&T continues to invest heavily in its infrastructure, planning to spend $3.5 billion annually to expand its fiber network and retire most of its legacy copper infrastructure by 2029. The company also plans to use the remainder of its projected tax savings for debt reduction, share buybacks, and strategic initiatives. CEO John Stankey highlighted favorable regulatory and tax environments, comparing current policy tailwinds to those following the Telecommunications Act of 1996 [1].

Comparative Performance

In comparison to its competitors, AT&T's Q2 performance was strong. Verizon lost 9,000 postpaid subscribers during the same period, while T-Mobile reported record-breaking subscriber additions. However, AT&T's fiber miss and comparisons to Verizon's upward earnings revision appeared to weigh on its stock [2].

Analyst Sentiment

Analysts remain cautiously optimistic about AT&T's prospects. The consensus rating is a "Moderate Buy" with 17 "Strong Buy" ratings, three "Moderate Buys," seven "Holds," and one "Strong Sell." The mean price target is $30.36, implying a 10.8% premium to current price levels [1].

Conclusion

Despite beating earnings and revenue estimates, AT&T's Q2 results were mixed, with strong wireless subscriber growth offset by slower-than-expected fiber additions and rising churn. The company's long-term infrastructure plans and favorable regulatory environment provide a solid foundation for future growth. However, investors will be closely watching the company's ability to execute on its aggressive expansion goals and manage churn.

References

[1] https://www.rcrwireless.com/20250723/business/att-beats-q2-estimates
[2] https://www.investing.com/analysis/big-3-telecom-wars-2-solid-showings-1-huge-winner-in-q2-200664531