Why Shares Of AT&T Are Up By 5% Today?

AT&T Video 22.04.21.

AT&T Stock Gains Ground After Strong Quarterly Report

Shares of AT&T gained upside momentum after the company released its first-quarter results. AT&T reported revenue of $43.9 billion and GAAP earnings of $1.04 per share, beating analyst estimates on both earnings and revenue. The company’s free cash flow totaled $5.9 billion.

AT&T showed strong results in communications and media segments. HBO Max added 2.7 million domestic subscribers, which was a positive surprise after the recent disappointing results from Netflix. Currently, HBO Max has 44.2 million domestic subscribers and nearly 64 million globally.

The company has also issued guidance for 2021. AT&T expects that its consolidated revenue will grow in the 1% range on a comparative basis. Adjusted EPS should be close to 2020 level. Free cash flow is expected to be in the $26 billion range, while the full-year total dividend payout ratio is projected to be in the high 50’s% range.

What’s Next For AT&T?

AT&T has certainly managed to surprise investors with a strong quarterly report. AT&T shares are traditionally viewed as a solid dividend play but investors often have questions about the company’s growth perspectives.

The recent results suggest that AT&T continues to find ways to grow its revenue and deliver strong free cash flow performance. At current prices, AT&T yields about 6.6%, which is sufficient enough to attract yield-oriented investors.

The dividend payout ratio remains at comfortable levels while the company’s business performs well which should attract more interest to the company’s stock.

It should be noted that AT&T shares remain far from pre-pandemic levels, and they have been mostly range-bound between $26 and $32 since March 2020. The strong quarterly report may serve as the catalyst that will ultimately push the stock out of this range. In this case, AT&T stock may also attract momentum traders who will help it get to higher levels.

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