J.P. Morgan Retains AT&T (T) Stock as Top Pick Amid Fiber and 5G Expansion

TLDR

• J.P. Morgan maintains AT&T as a top pick, highlighting fiber and 5G infrastructure along with favorable cost structure versus competitors
• First-quarter results exceeded expectations with earnings per share of $0.57 against $0.55 consensus and revenue of $31.51 billion
• Fiber-wireless convergence rate reached 45% among advanced home internet subscribers, representing a 3-point annual increase
• Analyst Sebastiano Petti lifted 2026 EBITDA projection to $48.1 billion while maintaining $33 stock price target
• Shares have gained approximately 5% year-to-date with the stock offering a dividend yield near 4.2%

AT&T (T) stock began Monday’s trading session at $26.15, reflecting a gain of roughly 5% for the year through the end of last week. This performance has closely mirrored the S&P 500 index, which posted a 5.8% advance during the identical timeframe.

AT&T Inc., T

J.P. Morgan reaffirmed AT&T’s position on its top picks roster Monday, with Sebastiano Petti, the firm’s analyst, emphasizing the telecommunications giant’s fiber and 5G infrastructure investments alongside its favorable cost dynamics compared to T-Mobile and Verizon.

AT&T unveiled its first-quarter financial results on April 22nd. The telecommunications company delivered earnings per share of $0.57, surpassing the analyst consensus estimate of $0.55. Revenue totaled $31.51 billion, exceeding the $31.29 billion projection and marking a 2.9% year-over-year increase.

Looking ahead to fiscal 2026, AT&T provided earnings guidance ranging from $2.25 to $2.35 per share. Wall Street analysts currently forecast $2.31 for the full year.

A particularly noteworthy metric that captured Petti’s attention: 45% of the company’s advanced home internet subscriber base also maintains AT&T wireless service. This convergence rate represents a three-percentage-point climb from the prior year and doesn’t include new fiber customers acquired through the Lumen transaction.

Petti interprets this data as validation that AT&T’s convergence approach is delivering results — creating integrated packages combining 5G, fiber, and Wi-Fi services to enhance customer retention.

EBITDA and Cash Flow Outlook

In response to the quarterly performance, Petti elevated his 2026 adjusted EBITDA forecast to $48.1 billion, incorporating anticipated expansion in converged customer segments, recent pricing adjustments, and the Lumen acquisition’s impact.

He simultaneously increased his second-quarter net postpaid phone customer addition forecast to 330,000 from his previous 320,000 estimate. His Overweight investment rating and $33 year-end price objective remain intact.

Petti anticipates EBITDA and free cash flow per share will advance at compound annual growth rates of 4% and 12%, respectively, through 2028’s conclusion.

AT&T distributed a quarterly dividend of $0.2775 per share on May 1st, translating to an annualized yield of approximately 4.2%. The company’s payout ratio currently stands at 37.25%.

Analyst Ratings and Institutional Activity

The overall Wall Street sentiment leans positive. Among 21 analysts monitored by MarketBeat, one maintains a Strong Buy recommendation, thirteen rate it a Buy, and seven hold a Hold rating. The average target price across analysts is $30.55.

Citigroup elevated its price target to $31.50 with a Buy recommendation in March. Scotiabank reduced its target to $31.00 in late April while maintaining a Sector Perform rating.

Regarding institutional investor activity, Truist Financial expanded its AT&T holdings by 3% during the fourth quarter, purchasing 163,766 additional shares to reach a total position of 5,694,478 shares valued at approximately $141.45 million. Multiple other institutional investors similarly increased their stakes during the third quarter.

AT&T’s 52-week trading range extends from $22.95 to $29.79. The stock’s 50-day moving average stands at $27.52, while the 200-day moving average sits at $26.05.

Separately, AT&T introduced new cybersecurity solutions targeting small business customers this week, including Dynamic Defense available on AT&T Business Fiber services.

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