AT&T Inc. (NYSE: T) has experienced a notable recovery in its stock price as the company redirected its focus to its core telecom businesses after years of expanding into less profitable ventures. Once a telecom giant with extensive interests in satellite television and media, AT&T divested those assets at a considerable loss and re-centered its strategy on the wireless and fiber-optic broadband sectors. This pivot marked a significant shift from previous strategies and was accompanied by a substantial dividend cut in 2022, ending a 36-year streak of annual increases.
Today, AT&T is firmly established as one of the three major telecom providers in the United States, alongside Verizon and T-Mobile. The company's revenues are primarily driven by its mobility (wireless) business, which constitutes over 60% of total revenue, with most customers being other businesses. Approximately 25% of revenues come from broadband and fiber services. Despite recent spinoffs, AT&T retains its profile as a mature company operating in a critical industry, but one that is unlikely to post rapid growth figures.
Since cutting its dividend, AT&T has stabilized its payouts, maintaining an annual expenditure of about $8 billion on dividends, more than triple the dividend yield of the S&P 500 average. Analysts project free cash flow for 2024 to range between $17 and $18 billion, down from just under $19 billion in 2023. These strong cash flows suggest there is enough flexibility for the company to maintain — and possibly raise — its dividend in the future.
Financially, AT&T's revenue for the first quarter of 2024 totaled $30 billion, reflecting a year-over-year decline and extending a trend of falling revenue from 2023. Operating expenses have risen faster than sales, exerting pressure on profit margins. However, the company benefited from a $500 million increase in income from equity investments, which helped produce nearly $4 billion in net income attributable to AT&T. The company expects full-year 2024 revenue to grow modestly by about 1%, although it has not provided detailed profit guidance. According to consensus estimates, profits could dip before returning to growth in 2025.
Despite these mixed operational results, AT&T stock has delivered more than 45% total returns over the last two years, including dividend payments and share appreciation. The stock currently trades at a trailing price-to-earnings (P/E) ratio of about 8.3, well below the S&P 500’s average of 21, which could attract value-oriented investors. Yet, with limited profit growth on the horizon and the company’s mature status, it is uncertain whether investors will view the current valuation as a compelling bargain. [Original article]
As of May 24, 2025, AT&T shares are trading at $27.42, reflecting a slight change of $0.18 (0.01%) from the previous close. On that trading day, shares opened at $27.46, reached a high of $27.54, a low of $27.15, and saw an intraday volume of 31,766,316 shares.
Looking forward, analyst forecasts for AT&T’s stock price over the next year are mixed. StockAnalysis.com reports an average 12-month price target of $28.81, with estimates ranging from $18 to $34. Tickergate.com pegs its consensus target at $29.30, reflecting expectations of a 6.12% rise from the current level, based on input from 56 Wall Street analysts. Bullish Brokers offers a notably more optimistic forecast, projecting that AT&T shares could reach $53.94 by the end of 2025 and trade between $41.64 and $58.55 in 2026. These disparate projections hinge on factors such as the rollout of 5G infrastructure, the growth in fiber-optic broadband markets, and potential gains from enterprise and IoT solutions (source).
Ultimately, AT&T now represents a more stable investment than in prior years, with a refocused business model, robust free cash flow, and consistent dividends. However, as gains over the last two years have been significant and the company is unlikely to see rapid expansion, future returns may be more modest. For income-oriented investors, AT&T’s current strategy and dividend profile may make the stock appealing, though those seeking growth or major capital appreciation should recognize the company’s mature position within the market. As always, given the influence of market volatility and shifting economic conditions, investors are encouraged to conduct comprehensive research and consult a financial advisor before making investment decisions.