AT&T shares edged lower on Friday, closing down 0.4% at $28.69 as traders adjusted positions ahead of the Presidents Day holiday and upcoming Federal Reserve communications. The decline pared some of the stock's recent gains, though it maintains an approximate 5.8% advance over the past five sessions.
Economic Backdrop and Sector Rotation
Cooler-than-expected January inflation data revived expectations for potential mid-year interest rate cuts, providing a supportive environment for dividend-heavy telecommunications stocks. However, market rotation remained uneven, with communications services and technology sectors lagging broader indices.
Peers displayed divergent performance: Verizon shares fell 0.9%, while T-Mobile rose 2.3%. Investors are bracing for several key economic releases in the coming week, including the personal consumption expenditures price index—the Fed's preferred inflation gauge—along with GDP figures and consumer sentiment data.
Strategic Moves and Financial Outlook
AT&T recently completed a significant $5.75 billion all-cash acquisition of Lumen's mass markets fiber business, adding over 1 million fiber subscribers and expanding its network reach across 11 states. The company forecasts reaching more than 40 million customer locations with fiber by the end of 2026.
In its late-January earnings report, AT&T projected 2026 adjusted earnings between $2.25 and $2.35 per share and outlined a long-term free cash flow target exceeding $21 billion by 2028. The stock currently offers a dividend yield of approximately 3.9% based on its quarterly payout of $0.2775 per share.
The next significant market catalyst arrives Wednesday with the release of minutes from the Federal Reserve's January policy meeting, which will provide fresh insight into policymakers' views on the interest rate trajectory.
