Market Update (NYSE:T): [$$] AT&T Set for Higher Cash Flow

[at] – AT&T (T:NYSE) By Evercore ISI ($38.50, April 11, 2016) Given our expectations for long-term improvements in free cash flow, we are increasing our price target on AT&T to $40 from $37 and maintaining a Hold rating. For the first quarter, we expect free cash flow after dividends of $766 million, up 129.9% year-over-year, with the dividend-payout ratio decreasing 857 basis points to 79.4% — underscoring our views of AT&T’s improving free-cash-flow strength. Last, we think AT&T’s focus on profitability (not chasing each subscriber) will drive wireless and consolidated earnings before interest, taxes, depreciation and amortization (Ebitda) margins higher on a year-over-year basis (up 365 basis points, up 169 basis points, respectively), but negatively impact subscriber growth. Read more on this. AT&T, Inc. (T) , valued at $238.05B, opened at $38.47. Looking at today’s trading action, the company’s one day range from $38.38 to $38.74 with the price of the stock fluctuating between $30.97 to $39.72 over the last 52 weeks. T shares are currently priced at 13.52x this year’s forecasted earnings, which makes them relatively expensive compared to the industry’s 3.45x earnings multiple for the same period. And for those looking to make a return holding the stock, the company pays shareholders $1.92 per share annually in dividends, yielding 4.99%. Consensus earnings for the current quarter by the 26 sell-side analysts covering the stock is an estimate of $0.69 per share, which would be $0.06 better than the year-ago quarter and a $0.01 sequential decrease. The full-year EPS estimate is $2.84, which would be a $0.13 better than last year. The quarterly earnings estimate is predicated on a consensus revenue forecast of $40.72 Billion. If reported, that would be a 24.98% increase over the year-ago quarter. More recently, Macquarie Initiated T at Outperform (Apr 5, 2016). Previously, Deutsche Bank Initiated T at to Buy. The average price target for T shares by the analysts covering the stock is $38.89, which is 1.09% above where the stock opened this morning. See more in (NYSE:T) Similar Articles: Market Update: AT&T Inc (NYSE:T) – AT&T Giving Free 48-Inch Samsung TV To New DirecTV And ‘Next’ Customers Stock Update: AT&T Inc (NYSE:T) – Despite Near-Term Noise, Wells Fargo Sees Higher Upside in Verizon and AT&T Market Update (NYSE:T): Sprint Seen ‘Pulling Away’ From Prepaid As AT&T, T-Mobile Battle
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