AT&T expects profit growth to accelerate through 2027, sets $20B buyback

AT&T (NYSE:T) expects a double-digit percentage growth in adjusted EPS and free cash flow of more than $18B in 2027, the telecoms giant said on Tuesday as it embarks on a multi-year strategic plan highlighted by continued profitable 5G and fiber subscriber growth.

The wireless carrier unveiled a strategy to expand its fiber broadband network to 50 million+ total locations by the end of 2029 and complete the modernization of its 5G wireless network with open technology by 2027.

It further expects improved financial performance to support $40 billion+ of anticipated shareholder returns through dividends and share repurchases over the next three years, including an initial share repurchase authorization of $10B that management expects to complete by the end of 2026.

Beginning in the first quarter of 2025, and as a result of the pending disposition of our DIRECTV equity method investment, AT&T (T) plans to report adjusted EPS and free cash flow excluding earnings and cash flows related to DIRECTV.

It projects adjusted EPS, excluding DIRECTV, of $1.97 to $2.07 (consensus estimate: $2.27) in 2025, accelerating to double-digit percentage growth in 2027. Free cash flow, excluding DIRECTV, is estimated at more than $16B in 2025, with annual growth of around $1B, resulting in free cash flow of $18 billion+ in 2027.

Consolidated service revenue growth is seen in the low-single-digit range annually from 2025-2027.

For this year, the firm expects adjusted EPS of $2.20 to $2.25 (consensus estimate: $2.21), with around 3% growth in wireless service revenue growth.

The company expects this plan to provide $50B+ of financial capacity over the next three years, largely through organic growth, and return $40B+ of this financial capacity. The plan would result in $20B+ in total dividend payments, with capacity for about $20B in share repurchases, from 2025-2027.

AT&T (T) expects to maintain its current annualized common stock dividend of $1.11 a share.

Shares of the wireless carrier fell 3.6% premarket initially, but were up around 2% at the time of publication.