TLDR
- AT&T stock rose 4.8% to $24.06 after second-quarter earnings beat expectations, with EPS of $0.65 versus consensus of $0.59.
- Free cash flow was $4.7 billion, up 6.3% year over year, above management’s guidance range.
- AT&T added 432,000 postpaid phone subscribers, well above analysts’ expectations of 338,500.
- FY2026 EPS guidance raised to $2.25-$2.35, quarterly dividend remaining at $0.2775 per share (4.6% yield)
- Wolfe Research upgraded the stock after earnings; There is a consensus rating of Moderate Buy with a price target of $29.19
AT&T (T) stock jumped 4.8% on Friday, to $24.06, after the company reported second-quarter results that beat Wall Street earnings estimates by a clear margin. Trading volume was significant, with over 80 million units traded, nearly 57% above the daily average.
The company reported adjusted EPS of $0.65, beating the consensus of $0.59. Revenue was $31.56 billion, slightly below estimates of $31.80 billion, but that wasn’t enough to dampen investor enthusiasm.
Free cash flow was the standout number. AT&T generated $4.7 billion in the quarter — an increase of 6.3% year over year — exceeding the company’s guidance range of $4.0 billion to $4.5 billion.
Adjusted EBITDA rose 5.2% year over year to $12.3 billion. Adjusted EBITDA margin expanded 110 basis points to 39.1%.
On the subscribers side AT&T Adding 432,000 postpaid phone customers. Analysts had expected 338,500. The number of new subscribers to advanced communications services also exceeded one million overall, driven by the growth of fiber and fixed wireless networks.
AT&T raised its full-year 2026 EPS guidance to a range of $2.25 to $2.35. Analysts currently expect $2.31 for the full year.
Analysts’ reaction
Wolfe Research upgraded AT&T following the results. Sanford C. Bernstein maintained an “Outperform” rating with a price target of $25.00. TD Cowen raised its target from $32.00 to $33.00, although it maintained a “hold” rating. Argus lowered its target from $33.00 to $30.00 but maintained a ‘buy’ rating.
Barclays cut its target from $26.00 to $24.00 with an “equal weight” rating. The current consensus stands at Moderate Buy, with an average price target of $29.19.
The stock trades at roughly 6.7x EV/EBITDA — a discount to Verizon’s 7.3x and T-Mobile’s 8.8x, and below AT&T’s five-year historical average of 7.5x to 8x.
Dividends and buybacks
AT&T It declared a quarterly dividend of $0.2775 per share, payable on August 3. That works out to $1.11 per year and a 4.6% yield. The payout ratio is 37.25%.
The company also has a $10 billion stock buyback authorization.
Short interest remained low at 1.81% of the float value. Institutional investors own 57.10% of the shares.
The 50-day moving average is at $22.79, while the 200-day moving average is $24.24. AT&T has a market capitalization of $167.14 billion, a P/E ratio of 7.97, and a beta of 0.24.
Unusually intense call option activity following the earnings release signaled traders positioning themselves for further upside.
Stop guessing and start investing with confidence. Knockout stocks It gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions – all in one powerful platform.
Register today and get 50% discount Full access to our premium stock picks.
Simply use the coupon code Special50 At checkout to claim your exclusive discount.
