AT&T Stock Analysis - Could AT&T's Stock Really be Worth $60 a Share? | Summary and Q&A

TL;DR

AT&T stock has caught the attention of Elliott Management, who have proposed a plan to increase its value and secure its dividend. The stock has potential to reach $60 per share, but its large debt and issues with acquisitions are concerning.

Key Insights

• ❓ Elliott Management's investment in AT&T reflects confidence in the company's potential for growth and value increase.
• 🌱 The proposed plan highlights the need for AT&T to address its debt and operational inefficiencies to boost its stock value.
• ❓ The suggestion of selling Direct TV is a significant step towards reducing debt and improving the performance of AT&T's acquisitions.
• 🥶 AT&T's ability to cover its cash dividends with its free cash flow and its consistent dividend growth history are positive indicators.
• 💐 Using a discounted cash flow valuation method, AT&T's stock value has the potential to reach around $60 per share.
• 🧚 However, the large debt load of AT&T must be considered when assessing the fair value of the stock.
• 🥡 A conservative estimate values AT&T stock at around $39 per share, taking into account both the equity value and net debt.

Transcript

Hi I'm Jimmy and this video we're going to walk through AT&T stock ticker symbol T. Now many of us dividend investors really like AT&T stock because it pays a great dividend. Right now it's got a dividend yield of about five and a half percent. And the stock is trading for about thirty seven dollars a share in this video. We're going to look at whe... Read More

Questions & Answers

Q: What has made AT&T stock interesting lately?

The investment by Elliott Management, a money management company, and their proposed plan to increase AT&T's stock value to $60 per share.

Q: How does AT&T plan to improve its stock value?

The proposed plan includes selling non-core assets, improving operations, focusing on capital discipline, reducing debt levels, and increasing oversight of management.

Q: Why is the debt level of AT&T concerning?

AT&T has accumulated over $160 billion in long-term debt due to acquisitions like Direct TV, causing concern for investors and analysts.

Q: What are the potential consequences for AT&T if they don't address their debt and acquisition issues?

Failure to address these issues may result in a stagnant stock price and hinder the company's ability to generate substantial profits and maintain its dividend.

Summary & Key Takeaways

• Elliott Management has invested $3.5 billion in AT&T stock and proposed a plan to increase its value to $60 per share.

• The plan includes selling non-core assets, improving operations, focusing on capital discipline, reducing debt levels, and increasing oversight of management.

• AT&T has accumulated high levels of debt due to acquisitions like Direct TV, which has resulted in subscriber losses, leading to the suggestion of selling it.