AT&T Inc.: Seeing the benefits of convergence and Lumen accretion

Research evidence excerpt

AT&T Inc.: Seeing the benefits of convergence and Lumen accretion

Global Research

22 July 2026ab

AT&T Inc. Equities

AmericasSeeing the benefits of convergence and Lumen

accretion Fixed-Line Communications

12-month rating Buy

12m price target US$31.00Expect momentum to continue in 2H

2Q results were stronger than expected and reflect the benefit of easing wireless

competition, Lumen accretion and the uptake of converged bundles. We see these Price (22 Jul 2026) US$23.04

tailwinds as sustainable and look for MSD EBITDA growth in 2H as the company RIC: T.N BBG: T US

leverages its industry-leading fiber footprint.

Trading data and key metrics

Results stronger: Revenue and EBITDA growth accelerated while subscriber net 52-wk range US$29.62-20.48

adds were also stronger yoy across postpaid phones/accounts, fiber and fixed Market cap. US$160b

wireless. 2Q EBITDA grew 5.2% yoy with Advanced Connectivity +8.0% and

Shares o/s 6,946m (COM)

Legacy -46% vs. +5.6%/-40% in 1Q.

Free float 100%

Tracking to high-end of guide: Performance is tracking to the high-end of Avg. daily volume ('000) 11,838

EBITDA guidance (+3.7% YTD vs. mgmt's 3-4%) and we believe higher memory/ Avg. daily value (m) US$274.3

handset pricing will likely weigh on handset upgrades in 2H, supporting margins Common s/h equity (12/26E) US$128b

(upgrade rate fell yoy in 2Q for first time in 6 quarters). We now look for 4.3% P/BV (12/26E) 1.2x

EBITDA growth in '26 (3.7% prior) including UBSe 5.3% in 3Q. FCF is still expected Net debt to EBITDA (12/26E) 3.1x

to exceed $18B for the year (UBSe $18.5B), up from $16.6B in '25. This includes

mgmt's outlook for stable FCF yoy in 3Q and growth in 4Q. EPS (UBS, diluted) (USD)

12/26E

Advanced Connectivity: Within Advanced Connectivity, consumer service From To % ch Cons.