Even the largest, most stable firms must shift in strategy to remain relevant in ever-changing times. Telecommunications giant AT&T Inc. (T) has been staying on top of new trends and successfully piquing investor interest, and not just for its attractive dividend yield. Investments in new technologies, 5G broadband capabilities, and even a spin-off of TimeWarner are all factors leading AT&T to a potentially lucrative future.
Reporting on these new developments, Ivan Feinseth of Tigress Financial Partners wrote that AT&T has also been working on reducing its debt burdens and strengthening its capital management and allocation. He expects a long-term rise in share price to be caused by increased revenues from more subscribers as well as “cost-saving synergies” from the TimeWarner deal.
Feinseth reiterated a Buy rating and declared a price target of $36, reflecting a potential 12-month upside of 27.39%.
The five-star analyst noted that the spin-off of TimeWarner to a merger with Discovery (DISCA) will meaningfully benefit its shareholder’s value, as the firm would control a 71% stake in the would-be publicly traded media company. Combining the two companies’ content would create a formative streaming service, supporting large names like HBO Max and Warner Bros., among several other television channels.
After removing itself from directly competing in the streaming wars, AT&T will be better suited to focus on its telecommunications businesses, namely the high-speed 5G broadband network rollout and Edge computing. Edge computing is a system for storage and processing of data located closer to the internet-of-things (physical devices which can run on networks) than to cloud computing.
Consequently, Feinseth sees AT&T as a highly attractive investment, due in part to his price target’s significant upside coupled with the firm’s high dividend yield.
On TipRanks, T has an analyst rating consensus of Hold, based on 7 Buy, 6 Hold, and 3 Sell ratings. The average AT&T price target is $31.79, which suggests a possible 12-month upside of 12.49%. The company closed trading Wednesday at a price of $28.26 per share.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.