AT&T Revels In 2024 Gains. Can Telecom Stock Repeat Success Next Year?

Investors in old Ma Bell would be proud of the 2024 performance of AT&T (T) stock. But can the telecom giant, which offers an attractive dividend, repeat its success next year?

AT&T stock has gained 36% in 2024.

Heading into 2025, nine Wall Street analysts rate AT&T stock a buy, while eight rate it hold, according to research firm FactSet. Also, one analyst rates AT&T stock as sell.

Fourth-quarter earnings for AT&T stock are due Jan. 27.

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Bernstein Research analyst Laurent Yoon recently initiated coverage of telecom firms and rated AT&T stock as outperform.

"Since the breakup of the original AT&T in 1982, it has taken four decades of consolidation to arrive at today's relatively stable oligopoly structure, characterized by roughly equal market shares but unequal market positions," he said.

AT&T Fiber-Optic Network Expands

Yoon rated Verizon Communications (VZ) and T-Mobile US (TMUS) at market perform.

"Each player continues to amalgamate into larger entities, while the demarcation between fixed and wireless blurs under the familiar theme of bundling — or as it's now called, convergence."

Meanwhile, AT&T has been expanding its wireline fiber-optic network in a push to add broadband customers.

At JPMorgan, analyst Sebastiano Petti holds an overweight rating on AT&T stock.

"AT&T remains our top pick," Petti said in a report.

"AT&T's rapidly expanding fiber footprint and 2029 fiber locations target of 50 million extends the company's leadership position in convergence, which should help drive higher share capture and improving economics over time as consumer preferences shift to converged bundles," Petti added.

At an investor day on Dec. 3, AT&T said it expects to churn out over $50 billion in free cash flow over the next three years with $20 billion going to stock buybacks.

Wireless Services Growth Key For AT&T Stock

Wireless phone services are still AT&T's primary business. At the investor day, the company forecast mobility service revenue growth of 2% to 3% annually over the next three years.

Meanwhile, AT&T stock holds an IBD Relative Strength Rating of 85 out of a best-possible 99, according to IBD Stock Checkup.

AT&T has returned to its telecom roots, shedding satellite TV broadcaster DirecTV and WarnerMedia.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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