On Friday, BofA Securities maintained its Buy rating on shares of AT&T (NYSE:T), with a steady price target of $20.00. The endorsement comes as AT&T prepares to announce its second-quarter 2024 results on July 24, before the market opens. AT&T has recently made headlines with its decision to raise prices on legacy plans starting in August.
The telecom giant has been observed to exhibit strong pricing power, a trend seen as a positive indicator for sustained growth within the industry. AT&T has been focusing on subscriber growth, cost-cutting measures, debt reduction, and is on course to achieve its leverage target of 2.5x in the first half of 2025.
The company's strategic initiatives, including the legacy plan price increases, are part of its broader efforts to streamline operations and bolster financial performance. AT&T's commitment to these goals has been recognized by BofA Securities as a key factor in their continued endorsement of the stock.
Investors and market watchers are now looking forward to AT&T's upcoming quarterly report, which will provide further insights into the company's progress and its impact on the stock's performance. The report is also expected to shed light on how the price adjustments will contribute to AT&T's financial targets and overall strategy.
In other recent news, AT&T Inc. is facing a $57 million fine from the Federal Communications Commission (FCC) for unauthorized sharing of customers' location information. Similarly, AT&T's CEO John Stankey is set to discuss the company's multiyear growth strategy at the upcoming J.P. Morgan Global Technology, Media and Communications Conference.
The telecom giant is focusing on the expansion of its 5G and fiber networks and expects capital investments to be in the $21-22 billion range for 2024.
Meanwhile, AT&T, along with other major telecom companies, is involved in legal action to prevent the reinstatement of net neutrality rules by the Biden administration. These rules aim to prevent internet service providers from blocking or throttling traffic to specific websites and from engaging in the paid prioritization of lawful content.
In congressional financial activities, Congressman Mike Kelly from Pennsylvania's 16th congressional district sold his AT&T shares, while Carol Devine Miller, a congress member representing West Virginia's 1st congressional district, also sold her AT&T shares.
These transactions are part of the regular financial activities of Congress members, who are required by law to disclose their trades. These recent developments reflect the dynamic nature of AT&T's position in the market.
InvestingPro Insights
As AT&T (NYSE:T) gears up for its second-quarter earnings report, InvestingPro data underscores a few key financial metrics that investors may find informative. The company's market capitalization stands robust at $129.85 billion, and it boasts a P/E ratio of 12.88, which adjusts to a more attractive 8.7 when looking at the last twelve months as of Q1 2024.
Moreover, the dividend yield as of the most recent data point is a generous 6.13%, reflecting AT&T's long-standing practice of returning value to shareholders, having maintained dividend payments for 41 consecutive years—a testament to its financial stability and commitment to investors.
AT&T's operational efficiency is mirrored in its gross profit margin, which is reported at 59.33% for the last twelve months as of Q1 2024. With a significant 24.29% one-year total return on the price as of the same period, the stock is trading near its 52-week high, indicating strong investor confidence.
This is further supported by two InvestingPro Tips: AT&T is a prominent player in the Diversified Telecommunication Services industry, and its valuation implies a strong free cash flow yield, suggesting that the stock may be undervalized relative to its cash-generating ability.
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