Evercore ISI maintains AT&T stock In Line with $27 target

On Thursday, Evercore ISI maintained its In Line rating on AT&T stock (NYSE:T), with a price target of $27.00. The firm’s analysis followed AT&T’s announcement of its agreement to acquire Lumen’s Mass Markets fiber assets for $5.75 billion. The transaction is seen as a strategic fit for AT&T, aligning with the company’s focus on scaling its connectivity services.

The acquisition deal is structured to facilitate AT&T’s expansion beyond its traditional wireline footprint. This approach is expected to be capital-efficient for AT&T, allowing the company to grow its operations without significant additional investment. Evercore ISI highlighted the financial prudence of the deal, noting that it should enable AT&T to leverage the attractive returns similar to those of its current fiber assets.

AT&T’s strategic move to purchase Lumen’s fiber assets is part of its broader effort to enhance its network infrastructure. The company aims to strengthen its position in the connectivity services market, particularly in the fiber segment, where demand continues to grow.

The acquisition is also designed to provide AT&T with a more extensive geographic reach, granting access to markets previously outside of its core service areas. This expansion is instrumental in AT&T’s pursuit of growth and could potentially increase its competitive edge in the telecommunications sector.

In summary, Evercore ISI’s reaffirmation of the In Line rating and $27.00 price target reflects a steady outlook for AT&T shares following the planned acquisition of Lumen’s fiber assets. The deal represents a strategic effort by AT&T to expand and enhance its connectivity services while maintaining capital efficiency and benefiting from attractive returns.

In other recent news, AT&T has been the focus of several noteworthy developments. The telecommunications giant’s first-quarter earnings report showed a 3.5% increase in EBITDA, with a notable rise in the wireless sector and consumer revenues. UBS analyst John Hodulik maintained a Buy rating on AT&T, setting a price target of $30, emphasizing the company’s potential for continued EBITDA and free cash flow growth driven by its fiber network expansion. Similarly, Bernstein SocGen Group raised AT&T’s stock price target to $30, citing the company’s success in growing its subscriber base through its fiber-led bundle strategy.

In a separate matter, AT&T has alerted shareholders about an unsolicited mini-tender offer from TRC Capital Investment Corporation, which seeks to acquire up to 4 million shares at a price significantly below the current market value. The company has advised shareholders to reject this offer, highlighting concerns about undervaluation and potential payment delays. Meanwhile, AT&T’s Chief Operating Officer, Jeff McElfresh, is set to discuss the company’s strategic growth plan at the J.P. Morgan Global Technology, Media and Communications Conference, reaffirming its 2025 financial guidance.

AT&T’s plans include significant capital investments and a share repurchase program, with an expected buyback of at least $3 billion in common stock by the end of the year. The company’s Mobility business continues to perform as expected, and AT&T is expanding its fiber offerings, although availability remains limited. These developments reflect the company’s ongoing efforts to solidify its market position and enhance shareholder value.

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