AT&T Investors Will Return To Stock With Wireless Growth In 2025: Analysts

Core Viewpoint - AT&T reported strong fourth-quarter revenues and earnings, exceeding analyst expectations, driven by growth in wireless service revenues and effective cost management [1][4][6]. Financial Performance - Consolidated revenues grew by 0.9% year-on-year to $32.3 billion, surpassing the consensus estimate of $32.1 billion [4]. - Adjusted earnings per share (EPS) were 54 cents, exceeding the expected 49 cents [4]. - Wireless service revenues increased by 3%, supported by stable postpaid phone churn of 0.85% and ARPU growth of 0.9% [2]. Future Outlook - Management anticipates a $1.5 billion increase in cash taxes year-on-year to $3.3 billion, but expects free cash flows to benefit from lower interest expenses and working capital [5]. - Analysts predict that AT&T's annual revenue growth will return to positive in fiscal 2025, with a modest acceleration in EBITDA growth due to improved cost-saving measures [7]. - The company is expected to continue normalizing U.S. volumes in 2025, with pricing actions and higher-priced plan adoption likely to boost ARPU [3]. Market Position and Analyst Ratings - AT&T Fiber achieved 40% penetration in homes passed with fiber and among fiber customers bundling wireless services [8]. - Analysts have maintained positive ratings, with price targets raised: Scotiabank from $24 to $26, RBC from $26 to $27, and Oppenheimer maintaining a target of $27 [10]. - Raymond James reaffirmed a Strong Buy rating with a price target of $28, highlighting AT&T as a strong total return story over the next 12 months [8][10].