AT&T Inc (T.N): Updating our AT&T Model for Favorable 2Q26 Results

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AT&T Inc (T.N): Updating our AT&T Model for Favorable 2Q26 Results

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23 Jul 2026 06:53:27 ET │ 29 pages

AT&T Inc (T.N)

Updating our AT&T Model for Favorable 2Q26 Results

CITI'S TAKE

AT&T delivered better 2Q26 results and reaffirmed its multi-year guidance.

AT&T’s results reflected an expanding fiber TAM, deeper converged service

penetration, and favorable operating leverage partly from efficiency Buy

initiatives. Results also reflect a more active employment of back book Price (22 Jul 26 16:00) US$23.04

pricing actions, while expanding its promotional menu to improve share

within the value segment. The combination of favorable volume & better Target price US$28.00↓

wireless service revenue growth should help AT&T meet its high-level from US$31.50

advanced connectivity revenue growth of at least 5% and generate Expected share price return 21.5%significantly better AC EBITDA growth. Possible Starlink entry into the

mobile category poses a risk to long-term industry structure and terminal Expected dividend yield 4.8%

value that may limit upside potential for at least the near-term. We updated Expected total return 26.3%

our valuation methods to reflect some of this uncertainty, contributing to a Market Cap US$157,879Mlower target of $28. We maintain our Buy on T shares.

Model Update — Wireless service revenue growth & Adj. EBITDA growth are tracking

to the higher-end of its FY26 guidance ranges. We updated our model for 2Q26

Price Performanceresults and made adjustments to fiber and postpaid volumes and rebalanced our

FCF estimated while keeping FY26 FCF at similar level to our prior expectation. (RIC: T.N, BB: T US)

Overall, we believe AT&T remains on track to achieve its FY26 guidance, including