On Tuesday, UBS reiterated its Buy rating on AT&T stock (NYSE:T) with a consistent price target of $30.00. The firm's analysis followed AT&T's fourth-quarter results, which showed performance that met or surpassed expectations, with key performance indicators (KPIs) driving the positive outcome. Revenue for the quarter saw a modest year-over-year increase of 0.9%, slightly ahead of UBS's estimate of 0.5% and the Street's 0.2%. EBITDA growth was reported at 2.2%, compared to UBS's projection of 2.3% and the Street's 2.6%, marking a slight decrease from the 3.4% growth observed in the third quarter.
AT&T's free cash flow (FCF) for the quarter was recorded at $4.8 billion, with capital expenditures totaling $7.1 billion, which was higher than UBS's forecast of $6.7 billion. The company's full-year performance was in line with guidance, demonstrating a 3.1% growth in EBITDA and a free cash flow of $17.6 billion.
Management at AT&T confirmed their 2025 guidance, which includes expectations of over 3% growth in EBITDA, aligning with UBS's estimate of 3.4% and surpassing the Street's 2.7%. The company also forecasts free cash flow exceeding $16 billion, excluding contributions from DirecTV, and earnings per share (EPS) between $1.97 and $2.07, excluding DirecTV, with UBS's EPS estimate slightly higher at $2.08. Furthermore, AT&T now anticipates reaching the higher end of its projected 2-3% wireless service revenue growth and expects mid-teens growth in consumer fiber broadband revenue, in line with UBS's forecast of 14%.
In other recent news, AT&T reported a significant rise in net income to $4 billion in its Q4 earnings for 2024, despite a decrease in full-year net income from $14.2 billion in 2023 to $10.7 billion in 2024. Furthermore, AT&T sealed an $850 million deal with Reign Capital, involving 74 less-utilized properties across the U.S., a transaction anticipated to generate immediate cash and potential future profit from property redevelopment. TD Cowen, RBC Capital, Scotiabank (TSX:BNS), and Bernstein's SocGen Group all raised their price targets for AT&T, while KeyBanc Capital Markets maintained a Sector Weight rating. The upward adjustments reflect recent performance and market movements, with a focus on AT&T's growth in phone subscriptions and Fiber-to-the-Home (FTTH) services. However, last year, AT&T experienced a significant security breach, resulting in the exposure of confidential FBI data. These are the recent developments for AT&T.
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