T changes

Pick any two versions below to diff them.

FromTo

View the full Nov 9, 2026 version

Price: $21.80
Discount category: Below intrinsic value
Next earnings: 2027-01-27
Next earnings is estimate: Yes
Company name: AT&T
Sector: Telecom
About: AT&T is one of the largest communications companies in the United States. It sells wireless phone service on its 5G network, and home and business internet through fiber and fixed wireless (AT&T Internet Air). It also sells older copper-based phone and data services, and it plans to shut down most of its copper network by the end of 2029. It reaches more than 39 million locations with fiber and plans to reach more than 60 million by the end of 2030. It serves more than 100 million people in the United States and nearly 2.5 million businesses. Revenue was $32.3 billion in Q3 2026. AT&T has agreed to sell its wireless business in Mexico.
Thesis: The market doubts that AT&T can grow its cash flow while competition in wireless increases and its debt stays high. Press reports said that on October 8, 2026, SpaceX agreed to buy spectrum to make Starlink Mobile a major mobile carrier in the U.S. Investors fear a new national rival. Postpaid phone churn also rose to 0.92% in Q3 2026 from 0.86% in Q2. AT&T paid $22.65 billion for EchoStar spectrum on July 28, 2026, mostly with new loans, and total debt was $159.6 billion at September 30, 2026. The company expects net debt to return to about 2.5 times adjusted EBITDA only during 2029. For the gap to close, four things must be true. Free cash flow must reach the guidance of $18 billion or more in 2026 and $19 billion or more in 2027. Postpaid phone churn must stay near 0.9%, and fiber and fixed wireless net adds must stay strong. The sale of the Mexico business and the sale of half of the fiber joint venture must close in the first half of 2027. Satellite service must stay a small service for rural areas and dead zones. The Q4 2026 report, expected in late January 2027, gives the next test with the 2027 guidance. If these checks pass, the gap can close slowly over two to three years. A new rival that forces price cuts would keep the gap open.
Risks: Wireless competition can increase. Cable companies sell wireless service, and press reports say that SpaceX wants to make Starlink Mobile a major U.S. carrier. Price cuts or higher churn would lower AT&T's cash flow. Total debt was $159.6 billion at September 30, 2026, after the $22.65 billion EchoStar purchase. AT&T does not expect its leverage target of about 2.5 times adjusted EBITDA until 2029. Higher interest rates on new debt would reduce free cash flow. Legacy revenue fell 24.5% in Q3 2026. AT&T expects legacy EBITDA to turn negative after 2027 until it removes the copper network costs. Approvals to shut down copper networks can delay this beyond 2029. The sales of the Mexico business and of half of the fiber joint venture need approvals. A delay would keep debt higher for longer.
Balance sheet: Cash: $10.8B Debt: $159.6B Net debt: $149.8B Undrawn credit line: $12.0B, to November 2030 Debt due within 12 months: $9.5B AT&T has a large debt. At September 30, 2026, total debt was $159.6 billion, of which $9.5 billion is due within one year, and cash was $10.8 billion. Net debt, as the company calculates it, was $149.8 billion, and it includes $1.2 billion of Mexico debt held for sale. Debt rose in Q3 2026 because AT&T borrowed $11.5 billion under a two-year term loan and $3.0 billion under a 364-day term loan on July 28, 2026, to pay $22.65 billion for EchoStar spectrum. In the same quarter, it repaid the 364-day loan and $2.5 billion of the two-year loan. Its $12.0 billion revolving credit agreement runs to November 3, 2030 and had no borrowings. Its credit agreements require net debt of not more than 3.75 times EBITDA, and AT&T was in compliance. The company expects net debt to return to about 2.5 times adjusted EBITDA during 2029. Free cash flow was $5.0 billion in Q3 2026, and the guidance is $18 billion or more for 2026. Noncontrolling interest was $16.0 billion at September 30, 2026. As of 2026-09-30.
Checkpoints: Jan 27, 2027 (estimate): Q4 2026 results and 2027 guidance. Pending. Watch: Free cash flow of $18 billion or more for 2026, postpaid phone churn near 0.9% and 2027 guidance of $19 billion or more pass; lower guidance or rising churn fail. Q1 2027 (estimate): Mexico sale closes. Pending. Watch: A closing with about $2.0 billion of cash in the first quarter of 2027 passes; a delay or a lower price fails.
Recent events: 2026-10-21: AT&T reported Q3 2026 results. Revenue grew 5.3% to $32.3 billion, and adjusted EPS was $0.65. Diluted EPS from continuing operations was $0.13, after a non-cash impairment of $2.6 billion on the Mexico business. Free cash flow was $5.0 billion. AT&T added 442,000 fiber, 327,000 fixed wireless and 379,000 postpaid phone customers, and postpaid phone churn was 0.92%. It raised its 2026 adjusted EPS outlook to the $2.40 range, lowered its capital investment outlook for 2027 and 2028 to $22 billion to $23 billion a year, and kept its free cash flow outlook of $18 billion or more for 2026. 2026-10-13: AT&T agreed to sell its wireless business in Mexico to Grupo Televisa and Fintech Holdings. It expects about $2.0 billion of cash at closing, plus other benefits, and expects the sale to close in the first quarter of 2027. 2026-10-08: Press reports said that SpaceX agreed to buy up to 14 megahertz of 800 MHz spectrum for its Starlink Mobile service, and that SpaceX said the purchase helps Starlink Mobile become a major U.S. mobile carrier. AT&T shares fell on October 9, 2026. These details come only from press reports. 2026-10-06: AT&T agreed to sell a 50% interest in Composite Fiber 37, the parent of the fiber network assets that it bought from Lumen, to affiliates of Global Infrastructure Partners and CPP Investments. The joint venture will also own Gigapower. AT&T expects the deal to close in the first half of 2027. 2026-09-14: AT&T agreed with Verizon and T-Mobile to form a joint venture that pools certain spectrum, so that satellite providers can serve wireless dead zones in the U.S. 2026-07-28: AT&T completed its purchase of 600 MHz and 3.45 GHz spectrum licenses from EchoStar for $22.65 billion. It borrowed $11.5 billion under a two-year term loan and $3.0 billion under a 364-day term loan to pay for them. 2026-07-22: AT&T reported Q2 2026 results. Revenue grew 2.3% to $31.6 billion, adjusted EPS was $0.65 and free cash flow was $4.7 billion. It added 432,000 postpaid phone customers, with churn of 0.86%. It raised its planned share repurchases for 2026 to about $10 billion. 2026-02-02: AT&T completed its purchase of substantially all of Lumen's mass markets fiber business for $5.756 billion in cash.