Key Takeaways
- J.P. Morgan maintains AT&T as a top pick, emphasizing fiber and 5G infrastructure investments alongside cost competitiveness
- The telecom giant surpassed Q1 projections with earnings per share of $0.57 versus the anticipated $0.55, generating $31.51 billion in revenue
- Convergence strategy shows traction with 45% of premium home internet subscribers bundling wireless services, marking a 3-point yearly increase
- Analyst lifts 2026 EBITDA projection to $48.1 billion while maintaining $33 share price target
- Shares have climbed approximately 5% year-to-date, offering investors a dividend yield around 4.2%
Shares of AT&T (T) began Monday’s session at $26.15, marking a gain of roughly 5% since the start of the year through Friday’s closing bell. The telecommunications giant’s performance has closely mirrored the S&P 500, which posted a 5.8% advance during the same timeframe.
J.P. Morgan reaffirmed its bullish outlook on AT&T Monday, with Sebastiano Petti, the firm’s analyst covering the stock, highlighting the telecommunications company’s extensive fiber and 5G infrastructure development and favorable cost structure compared to competitors T-Mobile and Verizon.
“We believe AT&T’s asset mix, strengthened by years of investment in fiber and 5G, and its marginal cost relative to competitors, positions the company well to drive share gains,” Petti stated in his research note.
AT&T unveiled its first-quarter financial results on April 22nd. The telecommunications provider delivered earnings per share of $0.57, surpassing the Street’s consensus estimate of $0.55. Total revenue reached $31.51 billion, beating expectations of $31.29 billion while representing a 2.9% year-over-year increase.
Looking ahead to fiscal 2026, AT&T has set earnings per share guidance between $2.25 and $2.35. Wall Street analysts currently forecast $2.31 for the full year.
A particularly noteworthy metric from the quarterly report: 45% of customers subscribing to AT&T’s premium home internet services also maintain AT&T wireless accounts. This convergence rate has expanded by three percentage points compared to the prior year and doesn’t include newly acquired fiber customers from the Lumen transaction.
Petti interprets this trend as validation that AT&T’s bundling approach is gaining momentum — integrating 5G, fiber, and Wi-Fi services into unified packages designed to strengthen customer retention.
Financial Projections and Cash Generation
In response to the quarterly performance, Petti increased his 2026 adjusted EBITDA forecast to $48.1 billion, incorporating expectations for expanded bundled customer adoption, recent pricing adjustments, and contributions from the Lumen integration.
The analyst also boosted his second-quarter forecast for net postpaid phone customer additions to 330,000 from his previous 320,000 estimate. His Overweight recommendation and year-end price objective of $33 remain in place.
Petti anticipates EBITDA and free cash flow per share will expand at compound annual growth rates of 4% and 12%, respectively, extending through year-end 2028.
AT&T distributed a quarterly dividend of $0.2775 per share on May 1st, translating to an annualized yield of approximately 4.2%. The company’s payout ratio currently stands at 37.25%.
Wall Street Sentiment and Institutional Holdings
The broader Wall Street community maintains a favorable outlook. Among 21 analysts monitored by MarketBeat, one rates the stock Strong Buy, thirteen recommend Buy, and seven assign a Hold rating. The average price target across all analysts is $30.55.
Citigroup elevated its price objective to $31.50 with a Buy rating in March. Scotiabank reduced its target to $31.00 in late April while maintaining a Sector Perform rating.
Regarding institutional ownership, Truist Financial expanded its AT&T stake by 3% during the fourth quarter, purchasing an additional 163,766 shares to bring its total holdings to 5,694,478 shares valued at approximately $141.45 million. Multiple other institutional investors similarly increased their positions in the third quarter.
AT&T’s shares have traded within a 52-week range of $22.95 to $29.79. The stock’s 50-day moving average currently sits at $27.52, while the 200-day moving average stands at $26.05.
In related corporate developments, AT&T introduced new cybersecurity solutions targeting small business customers this week, including Dynamic Defense on AT&T Business Fiber.
