AT&T: Cash Flow Weakness Looks Temporary, Valuation Still Compelling
AT&T is viewed as a strong income investment due to its solid dividends and share buybacks. The recent decline in free cash flow is linked to one-time factors, with expectations for recovery by the second quarter. The company's growth in internet subscriptions and convergence rate supports its positive outlook.
- ▪AT&T's recent free cash flow decline is attributed to non-recurring items such as Lumen integration and fiber buildout.
- ▪Free cash flow is expected to recover by the second quarter of 2026.
- ▪The company has added over 500,000 internet subscribers quarterly and has a 42% convergence rate.
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