Stock Markets
Deutsche Bank bumps AT&T shares target, impacted by Apple’s AI integration
On Friday, a Deutsche Bank analyst updated the financial model for AT&T (NYSE:T), leading to an increased price target for its shares. The new target is set at $26.00, up from the previous $24.00, while the firm continues to recommend a Buy rating for the stock.
The revision reflects minor adjustments to second-quarter and second-half 2024 forecasts, with an expectation of higher customer upgrade rates and industry switching activity. This anticipated change is attributed to the integration of generative AI into Apple (NASDAQ:)’s iOS18, slated for release in the fall of 2024. Additionally, the analyst has revised Free Cash Flow (FCF) estimates upwards after a more detailed analysis.
AT&T is regarded by Deutsche Bank as a leading choice within the Cable and Telecom sector due to its strategic position for fixed-mobile convergence. The company is also recognized for its robust wireless and home broadband industry dynamics, a positive growth outlook for its fiber broadband business, and the potential for further margin improvement as it decommissions networks.
Consistent operational execution and the possibility of increased wireless market share contribute to the favorable view. Furthermore, the analyst anticipates AT&T to resume share repurchases in the second half of 2025 following a period focused on debt reduction.
The report also suggests that the consensus FCF estimates for the years beyond 2025 might be undervaluing the company’s potential. The valuation of AT&T is deemed very attractive, with an estimated 8.5% unlevered free cash flow yield for 2024 and a multiple of 6.1 times the projected 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA).
In other recent news, AT&T Inc. has declared quarterly dividends for both its common shares and two series of preferred stock. The declared dividend for the common shares is $0.27 per share, with shareholders of Series A and C preferred stocks set to receive $0.3125 and $0.296875 per depositary share, respectively.
The company’s CEO, John Stankey, has proposed that Big Tech companies contribute to the Universal Service Fund, a government initiative subsidizing telecom and broadband services. This proposal could lead to a new funding model for the program. In a separate development, AT&T is involved in a legal challenge against the reinstatement of net neutrality rules by the Biden administration.
Lastly, significant stock trading activity has been noted by Congressman Mike Kelly and Congress member Carol Devine Miller, who both recently sold their shares in AT&T.
InvestingPro Insights
As AT&T (NYSE:T) garners attention with an updated price target from Deutsche Bank, insights from InvestingPro further illuminate the company’s financial health and market position. With a market cap of $136.38 billion and a dividend yield of 5.92% as of mid-2024, AT&T stands out as a significant player offering substantial returns to shareholders. This aligns with the Deutsche Bank’s perspective on the company’s attractive valuation and robust industry dynamics.
An InvestingPro Tip indicates that AT&T has a perfect Piotroski Score of 9, suggesting strong financial health and operational efficiency. This is particularly relevant considering the company’s strategic initiatives and potential market share increase mentioned by Deutsche Bank analysts. Additionally, the company’s price to earnings (P/E) ratio stands at 12.87, reflecting a market sentiment that may factor in the anticipated growth and integration of generative AI into products affecting telecoms.
Investors interested in a deeper analysis can find additional InvestingPro Tips for AT&T, which further dissect the company’s market performance and financial stability. With a total of 12 additional tips available, including insights on shareholder yield and valuation implications, InvestingPro offers a comprehensive toolkit for those looking to make informed investment decisions. To access these tips and more detailed metrics, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
(Reuters) -Private equity firm Insight Partners is on the brink of closing a new $10 billion-plus fund, roughly half the amount originally targeted, the Financial Times reported on Sunday, citing five people with knowledge of its plans.
Insight will not formally close its 13th fund until early next year, the report said, adding that the final figure may be closer to $12 billion.
Insight Partners declined to comment on the report.
The report said Insight is using a private equity-style structure to sell more than $1 billion worth of stakes in start-ups and to free up cash to return to investors.
One of the start-ups is Israeli cybersecurity firm Wiz, which had called off a $23 billion deal with Google parent Alphabet (NASDAQ:) in July, the report said.
New York-based Insight raised $20 billion for its 12th flagship fund in 2022, aiming to ramp up investments in software and technology companies.
JERUSALEM (Reuters) -Prime Minister Benjamin Netanyahu said Israel would inflict a “heavy price” on the Iran-aligned Houthis who control northern Yemen, after they reached central Israel with a missile on Sunday for the first time.
Houthi military spokesman Yahya Sarea said the group struck with a new hypersonic ballistic missile that travelled 2,040 km (1270 miles) in just 11 1/2 minutes.
After initially saying the missile had fallen in an open area, Israel’s military later said it had probably fragmented in the air, and that pieces of interceptors had landed in fields and near a railway station. Nobody was reported hurt.
Air raid sirens had sounded in Tel Aviv and across central Israel moments before the impact at around 6:35 a.m. local time (0335 GMT), sending residents running for shelter. Loud booms were heard.
Reuters saw smoke billowing in an open field in central Israel.
At a weekly cabinet meeting, Netanyahu said the Houthis should have known that Israel would exact a “heavy price” for attacks on Israel.
“Whoever needs a reminder of that is invited to visit the Hodeida port,” Netanyahu said, referring to an Israeli retaliatory air strike against Yemen in July for a Houthi drone that hit Tel Aviv.
The Houthis have fired missiles and drones at Israel repeatedly in what they say is solidarity with the Palestinians, since the Gaza war began with a Hamas attack on Israel in October.
The drone that hit Tel Aviv for the first time in July killed a man and wounded four people. Israeli air strikes in response on Houthi military targets near the port of Hodeidah killed six and wounded 80.
Previously, Houthi missiles have not penetrated deep into Israeli air space, with the only one reported to have hit Israeli territory falling in an open area near the Red Sea port of Eilat in March.
Israel should expect more strikes in the future “as we approach the first anniversary of the Oct. 7 operation, including responding to its aggression on the city of Hodeidah,” Sarea said.
The deputy head of the Houthi’s media office, Nasruddin Amer, said in a post on X on Sunday that the missile had reached Israel after “20 missiles failed to intercept” it, describing it as the “beginning”.
The Israeli military also said that 40 projectiles were fired towards Israel from Lebanon on Sunday and were either intercepted or landed in open areas.
“No injuries were reported,” the military said.
PARIS (Reuters) – Eight people have died trying to cross the Channel from France to England, French authorities said on Sunday, confirming earlier media reports.
This latest incident follows the deaths of 12 people earlier this month when their boat capsized in the Channel on its way to Britain and highlights the pressure on the British and French governments to find ways to tackle the boat crossings.
Jacques Billant, the Prefect of the Pas-de-Calais region, said that rescue crews were alerted that a boat with 59 people onboard was in difficulty in waters off the coast of Ambleteuse in the Pas-de-Calais area.
“A new drama took place around one in the morning and we deplore the death of eight people,” he told a news conference, adding that the other 51 onboard were now in the care of rescue and medical crews.
The dead were men from Eritrea, Sudan, Syria, Egypt, Iran and Afghanistan, he added.
The Channel is one of the world’s busiest shipping lanes and currents are strong, which makes crossing on small boats dangerous.
The latest incident brings to 46 the number of people who have died trying to cross the Channel from France since the start of the year, Billant said.
On September 14 alone there were eight attempts to cross the Channel from France and some 200 migrants were rescued, he said.
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