Key Stats for AT&T Stock
- Current Price: $25.88
- Target Price (Mid): ~$38
- Street Target: ~$30
- Potential Total Return: ~48% over 4.7 years
- Annualized IRR: ~8% / year
- Q1 2026 Earnings Reaction: -2.49% (April 22, 2026)
- Max Drawdown: -22.35% (January 27, 2026)
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What Happened?
AT&T (T) shares fell 2.49% on Wednesday, even after the company beat both earnings and revenue estimates for Q1 2026.
That reaction captures the tension at the center of this stock: a business executing on fiber and convergence, facing investor skepticism about whether cash flow can keep pace.
The headline numbers were solid. AT&T reported adjusted EPS of $0.57, beating the $0.55 consensus by $0.02, on revenues of $31.5 billion, up 2.9% year-over-year.
The company also delivered what John Stankey, AT&T Chairman and CEO, called its “best first quarter ever for Advanced Connectivity internet customer net additions,” with 584,000 total internet net adds, including 292,000 fiber and 292,000 fixed wireless.
Two things weighed on the stock.
Free cash flow came in at $2.5 billion, down from $3.1 billion a year ago, as capital expenditures rose to $4.9 billion from $4.3 billion to fund the accelerated fiber build following the Lumen Mass Markets acquisition that closed February 2.
Postpaid phone net adds also fell to 294,000, below the 324,000 delivered in Q1 2025, with postpaid phone churn ticking to 0.89% from 0.83%.
Importantly, AT&T maintained all full-year 2026 and multi-year guidance, including the $18 billion-plus free cash flow target, adjusted EPS of $2.25 to $2.35, and the commitment to return over $45 billion to shareholders through 2028.
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Is AT&T Undervalued Today?
At $25.88, AT&T trades at 11.25x next twelve months earnings and 7.08x NTM EV/EBITDA, with a 4.3% dividend yield and a free cash flow yield of around 10%. Those numbers already reflect a mature telecom, not a growth story. The question is whether the convergence strategy justifies a higher multiple over time.
The case for paying up rests on a cross-sell dynamic that is genuinely accelerating. Nearly 45% of AT&T’s advanced home internet subscribers now also choose AT&T for wireless, up more than 3 percentage points year-over-year, and the fastest organic growth in that metric the company has ever reported.
John Stankey noted in Q4 2025 that AT&T’s share of postpaid phone subscribers runs roughly 10 percentage points higher in fiber areas than in non-fiber areas. That dynamic drives lower churn and higher revenue per household. Advanced Connectivity’s operating income grew 14.8% year-over-year in Q1, even as the Legacy segment’s revenues declined 25.3% from copper decommissioning.
On valuation, AT&T’s 7.08x NTM EV/EBITDA sits modestly above Verizon’s 6.80x and well above Comcast’s 5.98x, per TIKR’s Competitors page.
That premium is defensible if EBITDA keeps accelerating due to convergence, but it leaves little room for execution misses. KeyBanc raised its price target to $36 from $30 with an Overweight rating, arguing EBITDA can grow from around 3% in 2026 to over 5% by 2028 as the Advanced Connectivity segment scales. The Street mean of around $30 is more cautious, reflecting the 10 Hold ratings among the 26 analysts tracked by TIKR.
The FCF miss will dominate near-term headlines, but it was pre-signaled. AT&T’s own management warned on the Q4 2025 earnings call that Q1 2026 would run below the full-year run rate for both EBITDA growth and free cash flow due to integration timing and accelerated fiber spending. A $2.5 billion Q1 is consistent with the $18 billion full-year target, but only if Q2 and Q3 ramp as expected.
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TIKR Advanced Model Analysis
- Current Price: $25.88
- Target Price (Mid): ~$38
- Potential Total Return: ~48% over 4.7 years
- Annualized IRR: ~8% / year
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The TIKR mid-case model targets approximately $38 by December 31, 2030, implying around 48% total return and roughly an 8% annualized IRR. The two revenue drivers are wireless service CAGR of around 2% annually and advanced home internet revenue growing 20%-plus per year organically through 2028. The margin driver is net income margin improving toward around 13%, consistent with TIKR’s mid-case estimate, as the Legacy segment shrinks and higher-margin Advanced Connectivity becomes the dominant earnings source.
The downside case reaches approximately $42 by 2030, still above today’s price, because even in a slower scenario AT&T’s cash generation and 4.3% dividend provide a floor. The upside case reaches approximately $61 if convergence accelerates and the multiple re-rates. The primary risk in any scenario is sustained postpaid churn above 1%, which would pressure wireless service revenue and slow the EBITDA expansion that the entire model depends on.
Conclusion
Watch free cash flow at the Q2 2026 earnings report, expected around July 23. If AT&T delivers $4 billion or more in quarterly free cash flow while keeping fiber net adds above 270,000, it validates that Q1 was the trough and the full-year $18 billion target remains on track. A second consecutive light quarter would force a harder conversation about whether the guidance is achievable.
AT&T is a capital-intensive business mid-transformation, trading at a discount to its own recent history with a 4.3% dividend as compensation for the wait.
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Should You Invest in AT&T?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up AT&T, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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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!
