AT&T (T) stock climbed nearly 2% today due to rising investor optimism after the company’s rival Verizon (VZ) posted better-than-expected Q2 results and raised its full-year guidance. The move is widely seen as a sympathy rally, with Verizon’s strong results signaling broader strength across the U.S. telecom sector.
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Since AT&T and Verizon compete in the same markets, wireless, broadband, and enterprise, Verizon’s upbeat results suggest that AT&T may also be benefiting from similar trends, especially ahead of its own Q2 earnings release, due on Wednesday.
VZ’s Q2 Snapshot
Verizon’s Q2 revenue hit $34.5 billion, up 5.2% year-over-year, and its adjusted EPS of $1.22 rose 6.1%. Looking forward, the company raised its 2025 free cash flow and profit forecasts, citing strong demand for premium wireless plans and broadband bundles.
Also, Verizon’s momentum suggests that consumer demand and pricing power remain intact, another positive sign for AT&T.
RBC Capital Optimistic Ahead of AT&T’s Q2 Results
According to RBC Capital Markets, AT&T is expected to add more consumer wireless broadband users in Q2 compared to last year, which was impacted by changes in the Affordable Connectivity Program (ACP).
Also, the firm predicts around 900,000 total net additions across major carriers, including Verizon, AT&T, and T-Mobile (TMUS).
The research firm also believes that the extension of bonus depreciation from 2017 will give telecom companies a big boost in free cash flow. Analysts say this could lead to a 9% increase in cash flow estimates, with Charter (CHTR) gaining the most, followed by AT&T.
Is AT&T a Buy, Sell, or Hold?
Turning to Wall Street, T stock has a Strong Buy consensus rating based on 12 Buys and two Holds assigned in the last three months. At $30.71, the average AT&T price target implies a 12.1% upside potential.
