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On Wednesday, Bernstein SocGen Group reaffirmed its positive stance on AT&T stock (NYSE:T), maintaining an Outperform rating and a $29.00 price target. The endorsement follows reports of AT&T’s negotiations to purchase Lumen’s consumer fiber business for a sum of $5.5 billion. Analysts at the firm suggest that the acquisition could be a strategic advantage for AT&T, aligning with its core capabilities, or there might be additional layers to the transaction that are not immediately apparent.
The proposed acquisition price equates to roughly $1,300 per fiber pass, a figure that aligns closely with AT&T’s own organic cost per pass and is notably less expensive than similar recent deals. Analysts at Bernstein speculate that the reported price might only represent AT&T’s share of a larger deal, possibly involving an off-balance-sheet joint venture structure akin to AT&T’s Gigapower arrangement or T-Mobile’s collaborations with Lumos and MetroNet.
There is also a possibility that AT&T could be taking on some of Lumen’s debt as part of the agreement. This could make the deal more complex than initially reported, and further details are anticipated to shed light on the exact terms of the transaction. The acquisition would potentially allow AT&T to phase out legacy copper-based broadband services and expand its fiber network within Lumen’s current service areas.
Bernstein analysts view the potential deal positively for AT&T and await more information to fully understand the implications of the acquisition. The firm’s continued Outperform rating indicates confidence in AT&T’s strategic direction and potential growth following the deal.
In other recent news, AT&T is reportedly in exclusive talks to acquire Lumen Technologies’ consumer fiber operations, potentially valuing the unit at over $5.5 billion. This acquisition could help Lumen reduce its debt load if the deal materializes. Meanwhile, analysts have shown confidence in AT&T’s financial prospects. Goldman Sachs has maintained a Buy rating on AT&T with a price target of $29, citing strong subscriber growth and a focused fiber strategy as key factors. Raymond (NSE:RYMD) James has also increased its price target for AT&T to $29, reaffirming a Strong Buy rating based on the company’s financial guidance and potential for growth.
Furthermore, British telecommunications company BT is exploring potential partnerships with AT&T and Orange as part of its strategy to revitalize its international business. AT&T has not commented on these discussions. In other industry developments, Verizon (NYSE:VZ) is facing competitive pressures, with its Chief Revenue Officer highlighting a challenging first quarter due to increased competition in the telecommunications sector. Verizon has adjusted its promotional activities to respond to fluctuating demand, impacting its performance metrics. These recent developments highlight ongoing strategic moves and market dynamics within the telecommunications industry.
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