Key Takeaways
- Scotiabank cut its price targets on AT&T, Verizon, T-Mobile and Comcast, citing competition from SpaceX and talk of AI disruption, and lowered AT&T’s to $27.50 from $29.25.
- AT&T CEO John Stankey says fiber is about three times faster than satellite and that SpaceX’s cellular plan would cost as much as building a macro network.
- AT&T trades at 6.8 times forward EV/EBITDA, down from a high of 7.9 times in September 2025, while consensus still has Verizon’s revenue growing every year through 2028.
- The thing to watch is whether people actually use satellite phone service, since T-Mobile says usage of its Starlink-powered service has come in below its expectations.
The threat SpaceX (SPCX) poses to AT&T (T) has moved off Elon Musk’s X feed and into Wall Street’s price targets.
On Sept. 27, Musk replied to a post estimating how much bandwidth Starlink could put in orbit by 2028:
“It is increasingly probable that Starlink will carry a majority of Earth’s IP traffic long-term. At that point, Starlink would de facto become the Internet and everything else would connect to Starlink.”
On Friday, Oct. 2, Scotiabank cut its price targets on AT&T, Verizon (VZ), T-Mobile (TMUS) and Comcast (CMCSA). It said the sector’s valuations have come under meaningful pressure over the past year from SpaceX’s competition and growing talk of AI disruption. AT&T’s target fell to $27.50 from $29.25, and Verizon’s to $51.50 from $52.50. (Scotiabank kept its ratings on all four.)
AT&T CEO John Stankey had already made his case earlier in the week, in an interview with Axios. On fiber: “Nothing beats it.”
Which is about what you’d expect AT&T’s CEO to say. So let’s test it.
Stankey has a point about fiber
Stankey said fiber is about three times faster than satellite, and he doesn’t see that changing soon:
“Satellite, at its best, if everything happens right over the next 10 years, is still not going to beat fiber.”
He also took on SpaceX’s plan to put cellular base stations alongside Starlink dishes. “It would cost as much to do that as it would to build a macro network to be able to handle those capabilities,” he said. He added that by law, companies “can’t radiate cellular signals from somebody’s house without their permission.” All told, he sees a “whole bunch of reasons” the plan won’t work.
AT&T also has the cash to keep building fiber. Its free cash flow has stayed between $18.5 billion and $20.5 billion a year for the last three years.
Here’s the thing: Scotiabank’s worry is wireless
SpaceX is going after your phone. It agreed to buy the AWS-4 and H-block spectrum licenses of EchoStar (SATS) for about $17 billion to support Starlink’s next-generation Direct-to-Cell network. It recently won FCC approval to provide international telecom services, and the FCC was set to vote on Sept. 30 on unlocking another 1,000 MHz of spectrum for satellite broadband.
The carriers are taking it seriously, too. On Oct. 1, Verizon, AT&T and T-Mobile formally launched a joint venture to expand direct-to-device satellite coverage by pooling their investment and spectrum.
Investors are already paying less for AT&T’s earnings. Its forward EV/EBITDA is 6.8x. That measure compares what the whole business costs, debt included, with the next 12 months of expected EBITDA, a rough gauge of cash operating profit. It’s down about 14% from its 7.9x high in September 2025.
That’s still above its 6.1x low from October 2023, so the discount so far is modest.
Think of Amazon: investors started paying less for retailers years before it took much of their business, as soon as they believed it could. Same deal here.
Isn’t this years away?
The obvious objection: SpaceX could go after airlines and ships before it takes on the big wireless carriers. That would push any hit to AT&T’s and Verizon’s earnings years out.
Analysts certainly aren’t modeling one yet. Consensus has Verizon’s revenue growing from $138 billion in 2025 to $146 billion by 2028, or about 2% a year.
Nothing in this week’s news gives analysts a reason to cut those numbers, either.
But a multiple is a bet on the years after 2028, and that’s when Starlink’s phone service would land. A credible satellite rival could also make it harder (and this is pure speculation) for carriers to keep raising prices, the way AT&T recently has.
The upshot
Stankey is right that fiber beats satellite in the home, and AT&T’s multiple can keep shrinking anyway, since the market is pricing SpaceX’s aim at wireless. That threat gets more credible with every spectrum deal.
Of course, SpaceX still has to prove people will use it. T-Mobile CEO Srini Gopalan told the Financial Times that usage of T-Mobile’s Starlink-powered service has fallen short of the carrier’s initial expectations.
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 of the stocks mentioned. Thank you for reading, and happy investing!
