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Exclusive Article
Former Dividend Aristocrat AT&T Posts Strong Earnings, Tries to Win Back InvestorsReported by Jessica Mitacek. Posted: 4/24/2026. 
Key Points
- AT&T outperformed analyst expectations with an 11% year-over-year increase in adjusted EPS and record results in fixed broadband and fiber net adds.
- The company is aggressively expanding its fiber footprint through the acquisition of Lumen Technologies’ fiber business and is poised to offer direct-to-device satellite broadband via a partnership with AST SpaceMobile.
- Wall Street is turning increasingly bullish, evidenced by rising price targets, zero Sell ratings, and significant institutional buying.
- Special Report: Elon Musk already made me a “wealthy man”
It’s not often that a 141-year-old company gets a chance to generate excitement. But after AT&T (NYSE: T) reported Q1 2026 earnings on April 22, that is exactly how the market reacted. After initially selling off in the lead-up to its earnings call, the stock gained nearly 3% on April 23. Investors responded positively to the company’s Q1 acquisition, its reiteration of guidance after record fixed broadband results, and a nearly 11% year-over-year increase in adjusted earnings per share (EPS).
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In doing so, the communication services fixture appears to have found favor with Wall Street again, as rising price targets and increased institutional buying signal bullish momentum. For income investors or those looking for value in telecommunications, here’s what you need to know. After a Troubling Run, The Tide Is ShiftingShares of T have gained nearly 16% from their year-to-date low, a welcome reprieve for shareholders who endured a more than 22% drop from the stock’s one-year high in Sept. 2025. Despite only one earnings miss in the past nine quarters, AT&T entered 2026 essentially flat relative to where it was five years earlier. During that period, the company lost its status as a Dividend Aristocrat in February 2022 after spinning off its WarnerMedia division. While that wasn’t welcome news for income investors, the stock had already been under pressure before the spinoff. From its February 2020 high to its five-year low in August 2023, AT&T fell by more than 50%. Although the company isn't planning any dividend increases through at least 2027, the stock continues to attract investors as it works its way back. It still yields about 4.2%, and since its five-year low AT&T has risen more than 86%, with shares trading not far off their 52-week high of $29.79. Meanwhile, the company’s strategic partnership with AST SpaceMobile (NASDAQ: ASTS)—which it signed in 2024—may finally be on the verge of bearing fruit. On April 22, AST SpaceMobile was granted approval by the U.S. Federal Communications Commission to deliver nationwide, direct-to-device (D2D) cellular broadband from space. The agreement calls for providing space-based cellular broadband directly to everyday, unmodified AT&T mobile devices. On the earnings call, CEO John Stankey said “customers are going to want [D2D space-based broadband], and I think it's natural that we work with [low Earth orbit] providers that have the capabilities to solve that problem, to integrate those offerings into our services.” Q1 Takeaways: AT&T Had Plenty to HighlightAdding to that momentum, AT&T posted both a top- and bottom-line beat when it reported Q1 results. EPS of $0.57 topped analyst expectations of $0.55, while quarterly revenue of $31.51 billion beat the $31.29 billion consensus. Notably, the company reported a record first-quarter consumer fixed broadband result, with 584,000 fiber and fixed wireless advanced internet net adds. It also added 1.1 million customers and roughly 4 million fiber locations when it closed a deal in Q1 to acquire Lumen Technologies’ (NYSE: LUMN) Mass Markets fiber business. That acquisition is expected to add about 8 million incremental fiber locations in 2026 and more than 60 million by 2030. AT&T finished Q1 with $12 billion in cash and cash equivalents and returned $4.3 billion to shareholders during the quarter — $2 billion in dividends and $2.3 billion in share repurchases under an existing buyback authorization that dates back to 2024. Management reiterated full-year and long-term guidance, including free cash flow of more than $18 billion in 2026, more than $19 billion in 2027, and more than $21 billion in 2028. It also affirmed adjusted EPS guidance of $2.25 to $2.35 for 2026, with a double-digit, three-year compound annual growth rate through 2028. Despite the strong EPS growth, the stock can still be viewed as undervalued: it is trading at a forward price-to-earnings multiple of around 11.5x, which aligns with an earnings growth forecast of roughly 10.04% over the next year. Wall Street Sentiment Is Slowly ShiftingFor the past year, AT&T has maintained a consensus Moderate Buy rating. But sentiment has been shifting. As of today, none of the 22 analysts covering the stock has a Sell rating. Over the past month, the average 12-month price target has moved upward, increasing from under 6% to more than 17%. Meanwhile, institutional buyers have outnumbered sellers for six consecutive quarters. Over the past year, inflows of nearly $24 billion have surpassed outflows of just over $10 billion. Short interest has ticked up but still represents only 1.69% of the float. Based on the company’s financial health, the stock re-entered the TradeSmith Green Zone six days ago. AT&T's MarketRank™ currently scores higher than 96% of the companies evaluated by MarketBeat, and it is ranked 41st out of 629 stocks in the computer and technology sector. |
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