AT&T Inc. (T)

Soon folks! Soon

Co provided an update at the Morgan Stanley European Tech, Media and Telecommunications Conference Strong cash generation and disciplined capital allocation gives AT&T financial strength and flexibility to invest in growth in its market-based priorities of fiber, 5G and HBO Max while simultaneously meeting its existing financial commitments. The company has refinanced more than $60 billion of debt at historically low rates and now has about $30 billion of debt coming due through 2025. AT&T expects 2020 full-year free cash flow of $26 billion or higher with a full year dividend payout ratio percentage in the high 50s%.1 The company also continues to expect gross capital investment in the $20 billion range for 2020.2 Network quality driven by significant investments in 5G and fiber helped support strong wireless financial and operational results and healthy broadband trends in the third quarter. In addition, the company believes that its recent and anticipated network investments will bolster AT&T's network foundation to compete as the need for high-quality connectivity only continues to increase. Looking forward, Stephens indicated that AT&T's integrated fiber strategy is expected to improve the company's connectivity offering for both consumer and enterprise markets and enhance its 5G network quality in a cost-efficient manner. Business transformation efforts are on track with the company's expectations and have already delivered savings from efficiencies, organizational alignments and the optimization of cash returns from select business operating units. AT&T remains focused on adding value for its customers through improved experiences and continued innovation, while simultaneously relying on technology and process improvements to enhance returns across its operations

AT&T has an impressive portfolio of assets. The company's HBO Max deal with Amazon will help its core businesses, and a potential Roku business will help drive millions in new users. All of these add up to billions in new annual revenue. The company's fiber business could also add billions in new annual revenue as long as it is focused on expanding.

The company's FCF is incredibly strong. The company remains committed to its businesses with capital expenditures. The company has a less than 60% payout ratio as it continues to pay its dividend of nearly 7.5%. In the immediate term, we expect the company to focus on debt repurchases followed by share repurchases.