Yahoo Finance AT&T (T) Management Updates Shareholders on 2023 Targets
The top management of AT&T Inc. T recently debriefed investors about the current business situation, the underlying growth opportunities and its progress on various operational metrics. John Stankey, the company’s chief executive officer, also shed some light on the continued business transformation initiatives to create long-term value for shareholders.
Stankey observed that AT&T is well on course to generate a cash flow in excess of $16 billion in 2023, led by an adjusted EBITDA growth of more than 3% driven by diligent execution of operational plans and ongoing cost-reduction efforts. In addition, he expected a healthy growth momentum in the postpaid wireless business with a lower churn rate and increased adoption of higher-tier unlimited plans.
With a customer-centric business model, the company is likely to benefit from the increased deployment of mid-band spectrum and greater fiber densification. AT&T expects to deploy mid-band spectrum to 200 million users by year-end 2023 and reach more than 30 million customer and business locations with fiber by the end of 2025. The extensive fiber footprint is likely to minimize its maintenance and repair costs while generating higher ARPU.
The Gigapower LLC, the joint venture initiative with BlackRock Alternatives, is likely to further enhance its capability to provide the best-in-class fiber network to Internet Service Providers and other businesses across the country. Leveraging its extensive fiber network and nationwide sales capabilities, AT&T aims to utilize Gigapower to commercially deploy a fiber network at 1.5 million customer locations outside the perimeter of its traditional 21-state wireline service footprint.
AT&T plans to deploy a standard-based nationwide mobile 5G network for a seamless transition to Wi-Fi, 5G devices and Long-Term Evolution. It intends to deploy 5G on low and mid-band spectrum holding.
The company is uniquely positioned to benefit from the upcoming 5G boom. As the first carrier in the industry, AT&T has presented its 5G policy framework that will stand on three vital pillars — fixed wireless, edge computing and 5G. It is focusing on a fiber densification strategy, which is anticipated to enhance broadband connectivity for consumers and enterprises, alongside 5G deployments boosting the end-user experience.
AT&T has acquired 80MHz of mid-band spectrum in the C-Band auction for a total consideration of $27.4 billion. These airwaves offer better propagation characteristics for optimum coverage in urban and rural areas. Through its Multi-access Edge Compute solution, the company offers the flexibility to manage data more appropriately. It leverages an indigenous software-defined network to provide low-latency, high-bandwidth applications for faster access to data processing.
The stock has lost 22.6% in the past year compared with the industry’s decline of 17.2%.
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AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Picks
InterDigital, Inc. IDCC, sporting a Zacks Rank #1, delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 579.03%. It has long-term earnings growth expectation of 13.9%.
It is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Akamai Technologies, Inc. AKAM, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 4.9%, on average, in the trailing four quarters. It has long-term earnings growth expectation of 10%.
Akamai is a global provider of content delivery network and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
IHS Holding Limited IHS, carrying a Zacks Rank #2, is another key pick. Based in London, the United Kingdom, it is one of the largest independent owners, operators and developers of shared communications infrastructure in the world by tower count.
IHS Holding has more than 39,000 towers across 11 markets — Brazil, Cameroon, Colombia, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia. The stock has gained 60.7% in the past six months.
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