Key Stats for AT&T Stock
- Current Price: $23.50
- Target Price (Mid): ~$39
- Street Target: ~$29
- Potential Total Return: ~65%
- Annualized IRR: ~13% / year
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What Happened?
Bernstein downgraded AT&T (T) to Market Perform late on Oct. 12, cutting its target to $24 from $25 over SpaceX’s push into broadband and wireless. The stock closed at $23.50 on Oct. 15.
AT&T reports Q3 results before the open on Oct. 21. It is likely the last report for CFO Pascal Desroches, who retires on Dec. 31. At a Bank of America conference on Sept. 10, he laid out where growth is supposed to come from, and the investor relations materials will show whether it is arriving.
The Lumen Gap Is Still AT&T’s to Close
Desroches’ clearest growth lever was the Lumen footprint. AT&T bought about 4.5 million consumer locations that were “about 25% penetrated as compared to 40%” in its own territory, and he expects “gradual improvements over the next several quarters.”
On Oct. 6, AT&T agreed to fold Forged Fiber 37, the unit holding the Lumen network, and Gigapower into a wholesale fiber joint venture with GIP and CPP Investments. Key terms:
- Ownership: AT&T will hold 50%, and the deal should close in the first half of 2027.
- Customers: The Lumen customer relationships stay with AT&T’s home internet business. At closing, the venture is expected to serve more than 1 million AT&T fiber subscribers.
- Accounting: AT&T will continue reporting Forged Fiber 37 as held for sale until closing. Afterward, it will book its share of the venture’s earnings rather than consolidating it.
- Proceeds: The cash AT&T receives at closing will help it reach net debt of about 2.5 times adjusted EBITDA within roughly three years.
Convergence, meaning customers who buy both home internet and wireless from AT&T, is the second gauge:
- Fixed wireless: Desroches said that base is already above 50%.
- All internet customers: BofA analyst Michael Funk put the share also taking AT&T postpaid wireless at 42.5% after Q2, and 45% outside the Lumen footprint.
- Target: Jenifer Robertson, who leads AT&T’s consumer business, restated the 50% goal.
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What Bernstein Flagged and What Q3 Has to Clear
The downgrade followed Oct. 9, when AT&T, Verizon (VZ) and T-Mobile (TMUS) fell together after SpaceX (SPCX) agreed to buy Grain Management’s 800 MHz spectrum. That deal still needs FCC approval. The selloff also landed in a week when the 10-year Treasury yield touched 5.36%, a 24-year high.
Bernstein also cited recent pricing moves by incumbents and expected fourth-quarter seasonality. AT&T was the last of five big wireless and cable stocks it rated Outperform, though it said Starlink is not a direct threat to AT&T’s fiber. Its $24 target sits below the Street mean of around $29.
On handset costs, Desroches said: “Just because the manufacturer has decided to increase prices for a variety of reasons, it doesn’t mean that, that changes our subsidy budget.”
For Q3, consensus calls for adjusted EPS of around $0.60 on revenue near $31.6 billion. NTM normalized EPS held around $2.41 between Sept. 30 and Oct. 15 as shares slipped. AT&T Mexico, which AT&T agreed to sell on Oct. 13 for $2 billion, will be classified as held for sale in the Q3 filing.
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TIKR Advanced Model Analysis
- Current Price: $23.50
- Target Price (Mid): ~$39
- Potential Total Return: ~65%
- Annualized IRR: ~13% / year
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Using the mid case, the TIKR model points to around $39 by Dec. 31, 2030. That is about 65% above $23.50, or around 13% a year.
For context, $39 is about 11 times TIKR’s consensus 2030 normalized EPS of around $3.48. Today’s price is about 11 times 2025 normalized EPS of $2.12, so the target leans on earnings growth rather than a higher P/E, though few analysts publish 2030 estimates.
The main risk is that SpaceX pricing pressure forces more retention spending and slows that earnings growth. Upside comes if AT&T closes the Lumen-footprint gap toward 40% penetration. On the downside, the Street’s lowest target of $20 sits about 15% below today’s price.
Conclusion
Watch the converged share against 42.5% on Oct. 21, along with any update on Lumen-footprint penetration. Holding convergence while the fiber base grows would support Desroches’ plan through the SpaceX noise. A slip, paired with subsidy-heavy holiday commentary, would give Bernstein’s caution weight.
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So what is AT&T stock actually worth?
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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!
