The firm also backed their $34 price target on the stock, which would represent a 40% upside from T’s Wednesday closing price of $24.19.An FBR analyst noted, “On July 22, 2010, T is expected to report 2Q10 results. We lower our 2Q10 EPS to $0.59, ahead of consensus’ $0.58. We forecast EBITDA of $10.875B on revenues of $31.1B, ahead of consensus’ EBITDA of $10.852B on revenues of $30.9B. T shares have outperformed the market over the last three months, returning -6%, versus the S&P 500 at -11% and in line with the telecom sector at -6%. Investors discount the outlook for T due to: (1) wireless price war risks as handset market penetration matures; (2) secular wireline margin pressure; (3)increased regulatory oversight; and (4) higher medium-term capex. In contrast, we see less-than-expected regulatory pressure, wireline margin expansion, lower medium-term capex, and a robust wireless revenue outlook as T’s (and VZW’s) extensive RAN, fiber, and data-center upgrades establish a competitive advantage and drive a lower absolute and relative cost structure and higher data-centric market share (and complementary network usage) in the enterprise and consumer segments.”
AT&T shares were mostly flat in premarket trading Thursday.
The Bottom Line
We have been recommending shares of AT&T (T
) since Mar.12, 2009, when the stock was trading at $23.35. The company has a 6.25% dividend yield based on last night’s closing stock priceof $24.19.
We have been recommending shares of AT&T (T
) since Mar.12, 2009, when the stock was trading at $23.35. The company has a 6.25% dividend yield based on last night’s closing stock priceof $24.19.AT&T Inc. (T) is a “recommended” dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.
) is a “recommended” dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.
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