AT&T Not For The Meek, But Buy And DRIP Indefinitely

Summary:

  • For now, it appears that the bullish support at T’s critical levels of $13s/ $14s remains robust since October 2022, with shareholders cheering its raised FY2023 FCF guidance.
  • Based on the stock’s volatile trend over the past few years, we believe that the stock is only suitable for income-oriented investors looking to buy and drip indefinitely.
  • FY2024 bring forth an expanded FCF generation, based on its reduced capex, ensuring its sustained dividends payouts.
  • With 6G likely to occur only by 2030, we may also see the management achieve its long-term net debt to EBITDA ratio of 2.5x.
  • Even then, T investors should be aware that the lead-lined issues are still unresolved, with T likely to bear the brunt of the projected rectification works worth nearly $60B.

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We previously covered AT&T (NYSE:T) in August 2023, discussing the massive pessimism embedded in its prospects, attributed to the sluggish stock movement despite the bottom line and Free Cash Flow [FCF] beats in FQ2’23.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.

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