AT&T CEO Sees Path to Sustained Growth
A New Era of Investment and Innovation
AT&T CEO John Stankey is optimistic about the company’s prospects for growth over the next three years. With a potential boost from the current administration’s tax policies, Stankey believes AT&T can accelerate its investments in 5G infrastructure and fiber, leading to faster sales and earnings growth.
Investing in the Future
Stankey highlighted the company’s commitment to investing $22 billion annually, with the potential to increase this amount if tax policies become more favorable. This investment will focus on expanding AT&T’s fiber footprint, which is already the largest in the nation. By getting ahead of the curve in 5G and fiber technology, Stankey believes AT&T can better meet customer needs and drive growth.
Shareholder Returns
At a recent investor day, AT&T announced plans to return over $40 billion to shareholders through stock buybacks and dividends from 2025 to 2027. The company’s current dividend yield stands at 4.89%, with a maintained dividend of $1.11 per share.
Guidance and Expectations
AT&T expects consolidated service revenue growth in the low-single-digit range annually from 2025-2027, with adjusted operating profit growth of 3% or better annually during the same period. The company anticipates adjusted EPS of $1.97 to $2.07 in 2025, accelerating to double-digit percentage growth in 2027.
Analyst Reaction
KeyBanc Capital Markets analyst Brandon Nispel viewed the investor day positively, citing AT&T’s clear strategy and execution plans. While maintaining a Sector Weight rating, Nispel believes the stock’s outperformance compared to Verizon can be attributed to its focused approach.
A New Chapter for AT&T
After spinning off its WarnerMedia business and merging it with Discovery, AT&T has refocused on its core telecom operations. The company has made significant progress in reducing debt, selling its majority stake in DirecTV to private equity firm TPG for $7.6 billion. With long-term debt now standing at $126 billion, down from over $128 billion in 2022, AT&T is poised for growth. Shares have risen 42% over the past year, outpacing its competitors.
Stankey’s Vision
“I think we’re early innings in our success story,” Stankey said, emphasizing that there is still much work to be done. With a clear strategy and investment plans in place, AT&T is positioned to drive growth and innovation in the years to come.
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