AT&T Inc (NYSE:T) has made a prudent decision to prioritize capital investments that would power its long-term growth, according to RBC Capital Markets.
The AT&T Analyst: Analyst Jonathan Atkin maintained an Outperform rating and price target of $31.
The AT&T Thesis: The Dallas-based company reported better-than-expected results for the second quarter, while its higher postpaid phone net addition cannibalized wireless due to the competitive environment, Atkin said in the note.
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AT&T posted consolidated revenues of $30.8 billion, up 3.5% year-on-year and ahead of consensus of $30.5 billion, the analyst stated. Consolidated adjusted EBITDA came in at $11.7 billion, topping consensus of $11.6 billion, he added.
Management expects cash tax benefits of $1.5-$2 billion in 2025 and of $2.5-$3 billion in each of 2026 and 2027, Atkin said. Due to this, AT&T decided to increase its capital expenditure in 2025 by $250 million at the midpoint and by $1.5 billion in 2026 and 2027.
The telecom giant is gaining traction in closing down legacy networks, he further commented.
T Price Action: Shares of AT&T had risen by 1.05% to $28.04 at the time of publication on Thursday.
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