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Investing.com -- KeyBanc Capital Markets upgraded AT&T to Overweight from Sector Weight, saying the recent share pullback offers an attractive entry point as the company’s growth outlook is set to accelerate.
The company’s shares surged as high as $29.8 in September, retreating by 15.5% since then.
KeyBanc analyst Brandon Nispel believes "the recent pullback was driven by competitive-related concerns in Wireless and are overblown; AT&T is forging its own path focused on driving Mobile/Broadband convergence."
“With that strategic focus, we expect its fundamental growth outlook to show accelerating adjusted EBITDA from ~3% in 2025 to nearly 5% in 2027/2028,” he added.
KeyBanc set a $30 price target on AT&T, implying about 19% upside from current levels.
Nispel said AT&T’s plan to reach 60 million fiber homes and businesses and its recent 3.45GHz spectrum acquisition from Echostar should position it as “the leader in convergence.”
The analyst estimates AT&T will have around 6.2 million converged customers by the end of 2025, nearly doubling to 12 million by 2030.
Nispel expects 2025 adjusted EBITDA to grow 3%, accelerating toward 4% in 2026 and close to 5% by 2027–2028.
He cited “healthy core postpaid phone momentum,” monetization of wholesale revenue from Dish, mid-teens fiber revenue growth, AT&T Air expansion, and cost savings from retiring legacy copper networks among key drivers.
AT&T’s capital return was also highlighted as attractive. Nispel pointed to a $1.11 annual dividend, a new share repurchase program, and forecast total shareholder returns of $2.12 in 2026—about an 8.5% yield—when combined with expected EPS growth of 6%.
“This appears favorable to Verizon, and nearly in line with our expectations for T-Mobile,” the note said.
Following its pullback, AT&T trades around 6.2 times KeyBanc’s 2026 adjusted EBITDA estimate, below its 10-year average of 7x. The $30 price target is based on a 7x 2026 EBITDA and 11.6x free cash flow multiple.
“Paired with a solid capital return and reasonable valuation, we like this risk/reward,” Nispel concluded.