DISCB - AT&T: A Re-Rating Is Inevitable

• AT&T has finally managed to exit its nightmarish acquisitions of DirecTV and Time Warner (pending), albeit at heavy losses and only partially.
• More importantly, AT&T's debt load will moderate significantly in the near future and put its capital structure on par with rivals such as Verizon, making a re-rating very likely.
• At Verizon's P/FCF multiple, AT&T's Communications business alone is worth ~$220B ~13% higher than AT&T's market cap (which includes Warnermedia). Therefore, AT&T has significant share price appreciation on the horizon.
• AT&T's impending dividend cut might lead to near-term disappointment for speculative traders and the re-rating might not happen until the end of 2023.
• Hence, I rate AT&T a buy at $27.45 for long-term DGI investors.

For further details see: