Raymond James analyst Frank Louthan maintained AT&T Inc. with an Outperform and a $26 price target ahead of its 2Q22 results.
With the WarnerMedia spin-off now closed, he believes the story is far more straightforward and that this will attract investors.
He previously discussed that following the Netflix, Inc. miss, eliminating volatile subscriber metrics from DTV and Warner Bros. Discovery, Inc. asset sales is highly advantageous.
Additionally, he believes simple recurring revenue names with solid dividends like AT&T were better performers in a problematic tape, and with macro issues impacting the market, he considers AT&T can outperform.
Following recent commentary on the conference circuit and his conversations with management, he made slight adjustments ahead of 2Q22 earnings scheduled for July 21.
Specifically, he took his 2Q22 mobility revenue estimate to $20.41 billion from $20.40 billion, with postpaid net adds remaining constant at 416,000 for 2Q22.
Q2 is a bit of an unknown as the WBD stub impacts the numbers still, plus the increased costs and price moves.
He believes higher costs from inflationary forces, the lost CAF II, and the winding down of FirstNet reimbursements pressuring EBITDA more than offset the price hikes at T.