AT&T (T) Stock Forecast & Price Target

AT&T is attractive because its wireless franchise remains the dominant engine, with about 70% of revenue coming from 75 million postpaid and 16 million prepaid customers, while the company is also using convergence to deepen relationships and drive more durable service revenue. Its 17 million residential broadband customers across a footprint reaching more than 60 million homes, along with growing fiber and fixed-wireless offerings, support better mix and long-term monetization even as it sacrifices some ARPU for subscriber growth and convergence gains. Financially, the business has shown solid execution with 2026 guidance for 5%+ advanced connectivity revenue growth, 6%+ EBITDA growth, $18B+ FCF, and a higher adjusted EPS outlook, while the planned sale of the Mexico business, which is only 3% of revenue, should simplify the portfolio and aid deleveraging.

AT&T is under pressure because its core wireless business, which drives about 70% of revenue, faces rising customer acquisition costs, higher churn, and more expensive device financing, all of which strain working capital and cash flow even as service demand remains solid. Although the company serves 75 million postpaid and 16 million prepaid wireless customers, plus 17 million residential broadband customers across a footprint reaching more than 60 million homes, pricing pressure in fiber and intensifying competition threaten profitability more than volume growth can offset. The planned sale of its Mexican business in October 2026, while only 3% of revenue, removes a meaningful cash-flow source, and combined with higher interest expense and ongoing 2027+ FCF pressure, it weakens the fundamental outlook.