AT&T’s journey has been anything but smooth sailing. Despite being a rock-solid company, the stock seems to have hit a rough patch as it plummeted even amidst a bull market, underperforming the S&P 500 (SPY) by over 17%. But is there a sliver of hope amidst this chaos?
Q3-2023 – A Glimmer of Hope
The Q3-2023 results for AT&T painted a slightly rosier picture. Revenues, cash from operations, and revenue per customer all showed marginal growth. In addition, the company’s cost-cutting measures helped elevate the critical wireless EBITDA margin by more than 2% to 43% in Q3-2023.
However, adjusted earnings per share saw a slight dip, albeit both revenues and adjusted earnings surpassed expectations. The mobility and fiber segments also exhibited a clear upward trajectory during this quarter.
Further, while there was a decline in net postpaid phone customers compared to the previous year, it was a marked improvement over the preceding quarter, which had caused significant market concerns.
Nevertheless, business wireline remained a sore spot, dragging down overall revenue growth.
Despite its tumultuous journey, AT&T seems to have weathered the storm and remains poised to exceed its net debt target for the year. Cash generation and gradual reduction of current liabilities are indicative of a potential turnaround.
While challenges lie ahead, the company’s robust outlook signals the potential for positive total returns in the near future. With a revised $21 price target, AT&T appears to be turning the tide in its favor.
Additionally, the company’s preferred shares, trading on the exchanges, offer intriguing possibilities for investors, especially during market turmoil.
Ultimately, AT&T’s journey may have been fraught with obstacles, but it’s the adversity that has shaped its resilience, making it a beacon of hope amidst the chaos of the financial markets.