AT&T Q2 Earnings 'Strike Balance Between Growth And Profitability,' Analyst Says

Shares of AT&T Inc (NYSE:T) were climbing Thursday after the company reported its second-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

Oppenheimer On AT&T

Analyst Timothy Horan maintained an Outperform rating while raising the price target from $21 to $23.

AT&T reported solid quarterly results, with "very strong wireless postpaid subscriber growth, ARPU, and Churn," Horan said in a note. "We think results suggests T continues to benefit from its transition to pure connectivity, and its consistent go-to-market.”

The company's service revenues grew 3.4%, which could accelerate slightly in the back half of the year "as legacy price increases go into effect in August," the analyst said. Management expects "mobility EBITDA growth trending to the higher-end of mid-single digit range, helped by price increases," he said.

Check out other analyst stock ratings.

Goldman Sachs On AT&T

Analyst James Schneider reiterated a Buy rating and $22 price target.

AT&T's results were broadly in-line with expectations, "with modestly strong wireless offset by modestly weaker wireline trends," the analyst said. The company's revenues of $29.8 billion were just shy of the consensus of $30 billion, while adjusted EBITDA of $11.34 billion came in-line, he added.

"Management also highlighted that while its FCF increased ~$400 mn Y/Y, the actual underlying trends are stronger given the company repaid $700 mn in vendor financing and also had $700 mn less in securitizations," Schneider said.

"AT&T noted that there will be a $480 mn restructuring payment related to its network transformation in 3Q," which will impact free cash flows but this is already reflected in the guidance, the analyst said.

Scotiabank On AT&T

Analyst Maher Yaghi reaffirmed a Sector Outperform rating while lifting the price target from $23 to $24.

"Q2 demonstrated once again that management remains focused on delivering results that strike a balance between growth and profitability," the analyst said. Churn in the wireless segment was healthy and was achieved "without onerous retention costs," he said.

The company's consumer wireline revenue growth was "impressive, supported by a focus on fiber as the U.S. continues to see a trend toward convergence of wireless and wireline services in a bundled offering," the analyst said.

T Price Action: Shares of AT&T were trading 1.96% higher at $19.54 Thursday morning.

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