AT&T Inc. (T) shares closed at $24.80 on Friday, down 0.32% for the session and 1.82% for the week, as the broader market rallied to new highs. The telecom giant continues to lag behind the gains seen in technology stocks, with the S&P 500 and Nasdaq both posting weekly and monthly advances on tech strength.
Key Dates Ahead
Investors are marking their calendars for June 9, when AT&T CFO Pascal Desroches will present at the Mizuho Technology Conference. The company is also scheduled to report its second-quarter earnings on July 22, before the New York Stock Exchange opens. The earnings call is set for 8:30 a.m. ET.
Guidance and Targets
AT&T reaffirmed its 2026 and long-term targets, including plans to return more than $45 billion to shareholders from 2026 to 2028. The company reiterated its second-quarter free cash flow outlook of $4.0 billion to $4.5 billion. Free cash flow, which is cash left after operations and capital spending, is a key metric for the company's dividend and debt reduction plans.
First-Quarter Performance
In the first quarter, AT&T reported revenue of $31.5 billion and adjusted earnings of $0.57 per share. The company added 294,000 postpaid phone subscribers, and CEO John Stankey described it as AT&T's "best first quarter ever" for Advanced Connectivity internet net adds. However, free cash flow fell to $2.5 billion from $3.1 billion a year earlier, as capital expenditure rose. Net debt stood at $126.4 billion at the end of the quarter.
Market Context
Telecom stocks broadly underperformed on Friday. Verizon Communications Inc. (VZ) fell 0.39% to $47.81, while T-Mobile US Inc. (TMUS) dropped 0.87% to $187.53. The sector lagged as growth stocks attracted more investor attention than steady dividend payers.
Analyst Views
Analyst ratings remain mixed. RBC Capital's Jonathan Atkin maintained an Outperform rating and a $31 price target on May 20. Scotiabank's Maher Yaghi held a Sector Perform rating but lowered the target to $31 in April. J.P. Morgan's Sebastiano Petti highlighted the company's convergence strategy—bundling wireless and home internet—as a key driver for share gains, citing fiber and 5G investments.
Capital Needs and Debt
AT&T's capital investment plans for 2026 are in the range of $23 billion to $24 billion, which could pressure free cash flow and shareholder returns. The company's net debt of $126.4 billion remains a focus for investors, especially if interest rates rise.
Macro Risks
With the May U.S. jobs report due on June 5, traders are on alert for macro moves. Higher interest rates could increase scrutiny on AT&T's debt load and dividend sustainability. The stock's recent underperformance suggests that investors are waiting for clearer signals from the company's upcoming webcast and earnings report.
