AT&T: Mixed Quarter, Tax-Driven Cash Flow Support, and Long-Term Fiber/5G Upside Keep Rating at Hold

AT&T, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Gregory Williams from TD Cowen maintained a Hold rating on the stock and has a $32.00 price target.

Gregory Williams has given his Hold rating due to a combination of factors that balance encouraging operational trends with lingering financial and competitive risks. He notes that AT&T delivered a mixed fourth quarter: profitability and revenue surprised positively, but subscriber growth in postpaid phones lagged as the company pulled back on aggressive promotions while T-Mobile and Verizon pushed harder during the holiday period. The quarter reinforced that management is prioritizing earnings over maximum subscriber gains, which supports margins but raises questions about long-term competitive positioning.

Williams also highlights that AT&T’s 2026 outlook, while broadly in line with expectations and a relief after the stock’s recent decline, relies meaningfully on favorable tax developments and reduced pension contributions, indicating that part of the free cash flow resilience is driven by one-time or timing-related benefits rather than pure operating strength. The new reporting structure and longer-term 2028 framework underscore a compelling convergence story around fiber and 5G, including anticipated benefits from integrating Lumen, but those upside drivers are still years away and come with execution risk. With the share price already down significantly, much of the near-term concern seems reflected in the valuation, yet the dependence on tax/pension tailwinds and a highly competitive industry environment limits conviction for an outright Buy, leading Williams to maintain a Hold rating.

In another report released yesterday, TipRanks – xAI also reiterated a Hold rating on the stock with a $25.00 price target.