AT&T Q4 Preview: Staying On The Sidelines Until We Get Closer To Growth (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• AT&T has a few growth engines such as Fiber and Mexico operations, but they are too small to impact the overall growth profile of the company.
• Fiber-related growth has mostly come from pricing improvements and increased fiber-penetration of broadband rollouts. However, volume growth is needed for a longer growth runway and here, broadband connections are decreasing.
• Margin improvement of $2 billion over the next 3 years is expected, but given the EBIT margin surprise record, there is potential of falling under the guide.
• The US Broadband Equity Access and Deployment Program (BEAD) is the key growth catalyst; this is so far not expected to kick in until 2025, making mid-late 2024 a better time for entry into AT&T.
• AT&T trades at a 36% discount to peers; it may be a good value buy right now. But for investors who prefer to accompany value with growth catalysts, I believe the stock is a 'neutral/hold' for a few more months still.

Read the full article here.