Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - BofA Securities has reinstated coverage of AT&T (NYSE:T) with a Buy rating and a price target of $32.00, according to a research note published Monday.
The firm cites AT&T’s balanced strategy to drive accelerating growth through its owned wireless and fiber assets as a key factor in the positive outlook. BofA also highlights the company’s potential for margin and free cash flow expansion based on wireless and wireline network efficiency.
AT&T’s strong return of capital plans, with $40 billion targeted, further supports the Buy rating. The company is also positioned to benefit significantly from the potential reintroduction of bonus depreciation, which BofA estimates could increase free cash flow by 21% in 2026 and 26% in 2027.
BofA Securities notes that AT&T currently trades at a 30% discount to T-Mobile and a 9% premium to Verizon (NYSE:VZ) on 2026 estimated EV/EBITDA metrics. The firm believes this valuation gap should narrow given AT&T’s operational momentum.
The research firm concludes that AT&T should trade more closely to T-Mobile than Verizon, citing the company’s strong combination of wireless and fiber assets and its targeted return of capital plans over the next several years.
In other recent news, AT&T has completed the sale of its remaining 70% stake in DIRECTV to TPG Capital, marking its full exit from the satellite television business. The financial details of this transaction were not disclosed. Additionally, AT&T has declared a quarterly dividend of $0.2775 per share, payable on August 1, 2025, to stockholders of record as of July 10, 2025. The company also announced dividends on its preferred stock. A U.S. judge has given preliminary approval for a $177 million settlement concerning data security lawsuits against AT&T, addressing breaches that exposed personal information of millions of customers. Despite criticism from former President Donald Trump regarding service reliability, AT&T has focused on expanding its core telecommunications services, including its 5G network and fiber internet. Investors seem to prioritize the company’s business performance and growth strategy. These developments highlight AT&T’s ongoing efforts to streamline its operations and focus on its primary business areas.
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