AT&T Inc. (NYSE:T) delivered a total return of 4.0% for the week ending July 10, 2026, surpassing the 2.7% gain in its unadjusted share price. The difference came from a $0.2775 quarterly dividend that went ex-dividend on July 10, underscoring the importance of income in the telecom giant's recent performance. The stock closed at $21.13 on Friday, with the dividend providing an annual yield of 5.3% based on four quarterly payments of $1.11 per share.
In comparison, Verizon Communications (NYSE:VZ) posted a total return of just 0.6% for the same period, as its share price fell 1.0%, while T-Mobile US (NASDAQ:TMUS) surged 5.7% without any dividend impact. The S&P 500 rose 1.2% last week, highlighting AT&T's outperformance relative to the broader market, though much of its gain was driven by the dividend rather than price appreciation.
Price Hikes and Churn Risks
AT&T's pricing power is set to be tested in August, when the company plans to increase rates on some retired Unlimited Your Way plans by $5 per smartphone line. Other legacy unlimited plans will see hikes of $10 for single-line accounts and $20 for multi-line users, while customers will receive additional hotspot data under the new rates. The company has not disclosed how many lines will be affected, but the moves could elevate churn—the percentage of subscribers leaving—which analysts view as a key metric to watch.
Wall Street remains divided on AT&T's outlook. Recent analyst price targets range from $18 (Wells Fargo) to $36 (KeyBanc), representing a potential move of -14.8% to +70.4% from Friday's close. Wells Fargo's Steven Cahall rated the stock Underweight, calling it the "least likely to strike a Starlink Mobile MVNO" deal, while KeyBanc's Brandon Nispel argued that the sector's negative mood does not align with short-term fundamental strength. Morgan Stanley and Barclays offered more moderate targets of $25 and $24, respectively.
Pension Settlement and Earnings Preview
AT&T faces a potential cash outflow after agreeing to a proposed $184.1 million settlement on Friday related to pension issues for about 300,000 current and former employees. The deal, which still requires court approval, includes no admission of wrongdoing. The sum represents roughly 1% of AT&T's 2026 free cash flow target of over $18 billion, which is calculated after capital expenditures and before the impact of the settlement payment.
The company is scheduled to report second-quarter results on July 22. In the previous quarter, revenue came in at $31.5 billion, up 2.9% year-over-year, with 292,000 fiber customer additions and 292,000 fixed-wireless subscriber gains. CEO John Stankey described it as AT&T's "best first quarter ever for Advanced Connectivity internet customer net additions." Investors will focus on whether subscriber growth, service revenue, and cash flow trends persist amid the upcoming price hikes.
Market Context and Rate Sensitivity
This week's economic data, including the June CPI on Tuesday, PPI on Wednesday, and retail sales on Thursday, will shape interest rate expectations ahead of major bank earnings. Higher market rates can pressure dividend stocks, as bonds become more attractive and financing costs rise. "This is a high-bar quarter with a narrow margin of error," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, in a Reuters report.
While AT&T's dividend provides a cushion, the stock remains exposed to downside risks from the August price hikes, potential churn, and the pending pension settlement. A strong inflation print could further weigh on the stock by pushing yields higher. Wells Fargo's $18 target implies a 15% decline from Friday's close, even before accounting for dividends.
Monday's trading is likely to be influenced more by macroeconomic factors and sector positioning than company-specific news. Clearer signals will emerge on July 22, when AT&T's earnings will reveal whether subscriber gains, price increases, and cash flow can justify a stock that relied heavily on yield last week.
