AT&T Leverages Fiber Expansion, Analyst Forecasts Strong Returns

AT&T Inc T last week was in the news for the wrong reasons, as hackers gained unauthorized access to its data systems.

There is 5%-6% upside to the Street's EBITDA estimates for the company and improving growth could drive "double-digit annualized returns for the stock," according to Goldman Sachs.

Analyst James Schneider maintained a Buy rating and price target of $25.

The AT&T Thesis: Both competitive intensity and capital intensity have moderated in the U.S. wireless industry, and this trend is expected to be sustainable, Schneider said in the note.

Check out other analyst stock ratings.

"AT&T is the most aggressive builder of fiber in the United States today, which should drive accelerating broadband revenue growth while stemming legacy losses," the analyst wrote. The company is cross-selling fiber and wireless to generate "strong returns on a per-customer basis," he added.

As the company executes on its copper decommissioning plan, Wireline margins could expand, despite a decline in legacy revenues, Schneider stated. "We believe AT&T could generate $4.5 bn in cost savings," he further wrote.

T Price Action: Shares of AT&T had risen by 1.561% to $23.04 at the time of publication on Monday.

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• T-Mobile Hit By Chinese Hackers After Rivals AT&T, Verizon Suffer Breach: Report

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