5/6/2025

Comprehensive Analysis

• Strategic Refocus and Legal Clarity: AT&T’s recent legal victory against the FCC’s $57 million forfeiture order and its exit from streaming/media businesses have de-risked the regulatory environment. This operational simplification, combined with a 62% stock rally over the past year, has positioned the company as a stable telecom play. The P/E of 17, while above its three-year average, remains attractive relative to the S&P 500.
• Q1 Financial Momentum and Profitability: Q1 results highlighted 2% revenue growth to $31 billion, 26% net income growth to $4.4 billion, and 324,000 postpaid wireless additions. The $1.4 billion in equity income from affiliates and $2.8 billion in free cash flow (Q1) underscore improved profitability. Adjusted EPS guidance of $1.97–$2.07 for FY2025 and $16 billion+ free cash flow projection reinforce financial resilience.