Key Stats for AT&T Stock
- Current Price: $24.24
- Target Price (Mid): ~$39
- Street Target: ~$29
- Potential Total Return: ~60%
- Annualized IRR: ~12% / year
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What Happened?
AT&T (T) acquired roughly 4.5 million fiber locations from Lumen Technologies (LUMN) in February, and they arrived far less penetrated than its own markets. Third-quarter results come before the market opens on Wednesday, October 21, per the company’s investor relations materials.
That will be the first quarterly report since CFO Pascal Desroches revisited the gap on September 10. AT&T first flagged it in March, saying the Lumen footprint sat well below its own 40% penetration. Shares closed at $24.24 on October 5, 2026, within a 52-week range of $19.89 to $29.44 on TIKR.
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Lumen Markets Started at 25% Penetration Against 40% in AT&T’s Core
Desroches updated the figures at the Bank of America Media, Communications & Entertainment Conference. “We acquired about 4.5 million locations, consumer locations from Lumen,” he said. “They were about 25% penetrated as compared to 40% in our owned and operated.”
Lifting that starting rate to 40% would mean roughly 675,000 more fiber customers, an illustration from his figures rather than a company target. Desroches did not give a current rate for the footprint on September 10, so any third-quarter update is the number to watch.
Desroches said AT&T is “still catching up somewhat” on installations. He separately noted that each market needs AT&T’s in-home equipment before carrying its brand: “you can’t turn it on a switch.”
Jenifer Robertson, executive vice president and general manager of AT&T Consumer, gave a window for the network work: “Several quarters to get the network efforts going at scale.” She added, “We haven’t put a time frame on that.”
The ramp also clouds AT&T’s 50% convergence target for internet customers who take its wireless. Desroches noted “the denominator of that ratio is increasing significantly,” so the rate can stall even as converged households grow.
The Cost of Closing the Gap Runs Through First Connections
Corning (GLW) was the clearest winner of the September 29 fiber supply agreement worth more than $3 billion, with Reuters reporting a 3.3% premarket gain in its shares. AT&T said the deal was already reflected in its outlook, so it mainly secures supply as AI data-center construction tightens optical fiber availability. Desroches made the related point on September 10: “The cost to pass, we have long-term commitments for fiber, and we’ve had them for a long time.”
Connecting homes is the harder cost. Desroches said that as more homes are already connected, “the second, third and fourth connection can be done via self-service, which reduces our overall cost profile.” Starting at around 25% penetration, more Lumen sales are likely to be first connections, which lack that advantage.
Pricing adds a second trade-off. Robertson said AT&T will “take a little bit of fiber ARPU dilution over here to grow the total value of the household now and over time,” so Lumen gains could come with lower fiber revenue per user. Scotiabank cut its target to $27.50 from $29.25 on October 2 and kept a Sector Perform rating, according to TipRanks.
The satellite venture with T-Mobile (TMUS) and Verizon (VZ) became a signed agreement on October 1, but has no named satellite partner or launch date. Desroches is set to retire on December 31, 2026, with Jennifer Biry becoming CFO on January 1, 2027.
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TIKR Advanced Model Analysis
- Current Price: $24.24
- Target Price (Mid): ~$39
- Potential Total Return: ~60%
- Annualized IRR: ~12% / year
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The mid case, realized December 31, 2030, points to around $39, compared with a 12-month Street mean target of around $29. Its forecast panel, which runs through 2035, assumes around 3% annual revenue growth and a net income margin of around 13%. That margin is in line with AT&T’s 13.3% average over the past five years, so the case leans on growth rather than margin expansion.
The primary risk is a slow Lumen ramp paired with fiber ARPU dilution while LTM net debt/EBITDA sits at 2.91x. Upside comes from AT&T-brand launches across the Lumen markets arriving sooner than the several quarters Robertson described. The downside is a stalled ramp that leaves the 4.6% dividend yield doing most of the work.
Conclusion
Consensus on TIKR puts Q3 adjusted EPS around $0.60 and revenue around $31.7 billion. After five straight quarterly adjusted EPS beats, another beat alone changes little. The signal is any update on Lumen penetration from its roughly 25% starting point, or fiber net adds showing installs catching up, without deeper fiber ARPU dilution.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
