AT&T Plans $20B in Buybacks Over 3 Years; Projects $2.07 EPS by 2025
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GAINS
AT&T (NYSE: T) is optimistic about its financial trajectory, projecting steady profit advancements over the next few years. The telecommunications giant anticipates earnings per share (EPS) to range between $1.97 and $2.07 in 2025, excluding specific items, with expectations of double-digit growth by 2027.
The company also foresees a modest annual rise in service revenue, with mobility services predicted to grow by 2% to 3% each year. Meanwhile, AT&T’s consumer fiber broadband is expected to see more substantial growth in the mid-teens.
Furthermore, free cash flow, excluding DirecTV, is projected to hit $16 billion in 2025, increasing by $1 billion annually to surpass $18 billion by 2027. These robust forecasts are supported by anticipated cost savings of $3 billion and a focus on enhancing operational efficiency.
AT&T Plans $20 Billion in Stock Buybacks by 2027
In a move to bolster shareholder value, AT&T has announced an ambitious share repurchase plan, authorizing $20 billion in buybacks to be completed by the end of 2027.
The company aims to return over $40 billion to stockholders through dividends and share repurchases over the next three years. An initial $10 billion has been set aside for share repurchases, which will commence once the net leverage target is achieved and is expected to conclude by 2026. This strategy underscores AT&T’s commitment to enhancing shareholder returns while maintaining financial discipline.
AT&T Stock Gains on Upbeat Outlook and Sustained Projected Growth, Hits 52-Week High
The outlined profit growth and buyback plans highlight AT&T’s strong financial footing and confidence in its future performance. By preserving a $1.11 per share annual cash dividend and authorizing substantial share repurchases, AT&T is positioning itself as a compelling investment choice.
The divestment of DirecTV and a pivot towards core telecom services enable the company to streamline operations and reduce debt. This strategic shift towards enhancing 5G and fiber-optic networks is designed to improve service offerings and broaden market reach. Investors can anticipate increased returns through dividends and share repurchases, while AT&T enhances its financial agility for future investments and debt management.
AT&T’s stock has shown a positive trajectory, reflecting market confidence in the company’s strategic direction. The stock opened at $23.41 and reached a current price of $23.62, with a day low of $23.3801 and a day high of $24.03. Notably, the 52-week high of $24.03 was achieved, indicating a recovery from the 52-week low of $15.94.
This upward movement is consistent with recent trends, which have seen the stock gradually rise from early November levels between $22.04 and $23.27. The market capitalization stands at $169.48 billion, with a dividend yield of 4.89%, further emphasizing AT&T’s appeal to investors.
AT&T’s financial metrics present a stable outlook, with a trailing P/E ratio of 19.20 and a forward P/E of 10.41, suggesting potential growth. The company maintains a healthy dividend rate of $1.11, supported by a solid book value of $14.266 and a price-to-book ratio of 1.6557.
Despite a debt-to-equity ratio of 125.151, the company’s strategic initiatives aim to manage and reduce this over time. Analysts have rated the stock as a “Buy,” with a recommendation mean of 2.22. The target price range spans from a low of $13.00 to a high of $30.00, with a median target of $24.00, indicating room for potential appreciation.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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