Morningstar Rating

Stock Research and Analysis

by Michael Hodel, CFA

Bulls Say

AT&T has direct relationships with millions of residential and business customers. The firm's network upgrade plans should enable it to offer these customers more and better services, driving revenue growth.
AT&T and Verizon Wireless stand head and shoulders above the rest of the U.S. wireless industry. The wireless business generates strong profits and differentiates the firm from the cable companies.
The DirecTV acquisition makes AT&T a giant in the television industry, providing it with the clout needed to shape the future direction of this business. Read more 

Bears Say

A large portion of revenue and cash flow still comes from phone services, but this business remains under attack from competitors and technological substitution.
AT&T's heavy reliance on the iPhone is an issue. About half of its retail customers use the device. T-Mobile has taken direct aim at these customers with its aggressive moves in the marketplace.
AT&T's local network upgrade may leave the firm with too little capacity to offer the data speeds customers increasingly demand. The DirecTV deal provides yet another outmoded network. Read more 

Management

We have moved our stewardship rating on AT&T to poor from standard as a result of recent capital allocation decisions by management. In particular, we believe the decision to acquire DirecTV for a premium price diminishes AT&T's competitive   Read more 

Profile

AT&T is the second-largest U.S. wireless carrier, serving more than 100 million customers. The firm is also provides local fixed-line services, including voice, data   Read more 

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