Key Highlights
- Shares of AT&T climbed 4.8% to reach $24.06 following second-quarter earnings that surpassed forecasts, delivering EPS of $0.65 versus the Street’s $0.59 estimate
- The telecom giant generated $4.7 billion in free cash flow, marking a 6.3% increase from the prior year and exceeding internal projections
- Postpaid phone net additions totaled 432,000, significantly outpacing the analyst consensus of 338,500
- Management elevated fiscal 2026 EPS projections to $2.25–$2.35, while maintaining the quarterly dividend at $0.2775 per share (yielding 4.6%)
- Following the earnings release, Wolfe Research upgraded its stance on the stock; the Street consensus now reflects a Moderate Buy rating with a $29.19 average target
Shares of AT&T (T) rallied 4.8% on Friday, closing at $24.06, following the telecommunications company’s second-quarter results that significantly exceeded Wall Street’s profit expectations. Trading volume spiked to over 80 million shares, representing approximately 57% above the typical daily average.
The Dallas-based carrier delivered adjusted earnings per share of $0.65, comfortably surpassing the analyst consensus of $0.59. While revenue of $31.56 billion fell marginally short of the $31.80 billion forecast, the shortfall did little to dampen market sentiment.
The quarter’s most impressive metric was free cash flow generation. AT&T produced $4.7 billion during the period — representing a 6.3% year-over-year increase — exceeding management’s own projected range of $4.0 billion to $4.5 billion.
Adjusted EBITDA rose 5.2% from the year-ago quarter to $12.3 billion. The company’s adjusted EBITDA margin improved by 110 basis points, reaching 39.1%.
On the customer acquisition front, AT&T brought in 432,000 postpaid phone net additions. This figure exceeded Wall Street’s expectation of 338,500 additions. The telecommunications provider also surpassed the one million mark for total new advanced connectivity subscribers, powered by robust fiber and fixed wireless adoption.
Management upgraded its fiscal year 2026 earnings outlook to a range of $2.25–$2.35 per share. Current analyst projections place full-year earnings at $2.31.
Wall Street’s Take
Wolfe Research moved to upgrade AT&T in the wake of these results. Sanford C. Bernstein maintained its “outperform” stance with a $25.00 price objective. TD Cowen increased its price target from $32.00 to $33.00, though the firm kept its “hold” rating intact. Argus lowered its target to $30.00 from $33.00 while preserving a “buy” recommendation.
Barclays reduced its price objective to $24.00 from $26.00, maintaining an “equal weight” view. The overall Street consensus reflects a Moderate Buy rating, with the average price target landing at $29.19.
AT&T currently trades at approximately 6.7x forward EV/EBITDA — representing a valuation discount compared to Verizon at 7.3x and T-Mobile at 8.8x, and below the company’s own five-year historical range of 7.5x to 8x.
Shareholder Returns and Capital Allocation
The company announced a quarterly dividend payment of $0.2775 per share, scheduled for distribution on August 3rd. This translates to an annualized dividend of $1.11 and a yield of 4.6%. The dividend payout ratio currently stands at 37.25%.
AT&T maintains an active $10 billion share repurchase program.
Short interest in the stock remains modest at 1.81% of the float. Institutional ownership accounts for 57.10% of outstanding shares.
Technical indicators show the 50-day moving average at $22.79, with the 200-day moving average at $24.24. The company commands a market capitalization of $167.14 billion, trades at a price-to-earnings ratio of 7.97, and carries a beta of 0.24.
Notably elevated call option volume in the session following the earnings announcement suggested traders are positioning for additional upside momentum.
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