Analyst Still Bullish On AT&T Despite Leverage, Dividend Concerns

AT&T Inc’s T share price seems to price in only negative news, including investor concerns around T-Mobile Us Inc TMUS taking share, disruption in the media business, and the C-band auction, according to BofA Securities.

The AT&T Analyst: David Barden maintained a Buy rating for AT&T, with a price target of $36.

The AT&T Thesis: There are three main concerns around the company’s financials: leverage, dividend and free cash flow. Although AT&T had not raised its dividend for the first time in three decades, it maintained it at the current levels.

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“AT&T has been successful at paying down debt, pushing maturities out, and refinancing at lower rates,” the analyst wrote in a note, while adding that the company may soon announce share repurchases.

Referring to AT&T’s media strategy, the threat from T-Mobile in wireless, and DirecTV trends, Darden said, “WarnerMedia has been driving synergies by eliminating duplicative positions, has revamped senior management, and is leaning into its HBO Max strategy.”

T Price Action: Shares of AT&T declined by 1.3% to $28.98 at the time of publication Monday.

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