2024-02-17 10:00:00 ET
Summary
- T's FY2024 guidance has been misunderstood, since the net effect remains positive, with growing Free Cash Flow generation and safe dividend investment thesis.
- The same has been observed in its expanding adj EBITDA margins and FCF margins over pre-pandemic averages, exemplifying its ability to achieve the net debt-to-adjusted EBITDA ratio target of 2.5x.
- Much of the tailwind is attributed to T's sticky consumer base and growing ARPUs, despite the recent price hikes and intensifying market competition.
- Combined with the stable debt situation, supposed Fed pivot from H1'24, and the stock's recent pullback, we believe that the stock looks attractive for those looking to buy the dip.
We previously covered AT&T (T) in October 2023, discussing the excellent bullish support at the $13s/ $14s, significantly aided by the moderately raised FY2023 FCF guidance and the projected moderation in its capital investments moving forward.
With its dividend investment thesis remaining robust, we had rated the stock as a Buy for income-oriented investors looking to buy and drip indefinitely....
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AT&T: FY2024 Guidance Has Been Misunderstood, Buy The Pullback