AT&T Stock Price Makes New Low Ahead of Earnings – What To Expect

AT&T stock price (NYSE: T) pulled back to 52 week lows ahead of this morning’s fourth quarter earnings, hitting $22.95 before closing out Tuesday at $23 for a 6.35% decline YTD. With the stock under pressure, the quarter provides the read on whether the company’s accelerated fiber and 5G infrastructure investments are translating into sustainable service revenue growth that can offset persistent wireline declines.

Expectations on the quarter is for $0.47 adjusted EPS and $32.9B revenue, with the EPS estimate 13% below the prior year quarter’s $0.54, creating a low bar that shifts investor focus to 2026 guidance and capital allocation commentary rather than the quarter itself.

The setup reflects a credibility test on execution rather than demand. AT&T has delivered four consecutive quarters of “tight to tape” results, with a 4Q24 beat followed by a 1Q25 miss, a 2Q25 beat, and 3Q25 in-line, while management held the FY25 adjusted EPS range at $1.97 to $2.07 (midpoint $2.02) throughout. That guidance discipline capped upside revisions despite operational momentum in wireless and fiber subscriber additions, and the 2Q25 reaction demonstrated the market’s preference for raised targets over reported beats: shares fell 3.2% after a clean EPS and revenue beat when management left the full-year outlook unchanged.

The result will determine whether AT&T can articulate a 2026 framework that balances incremental profitability gains from the installed infrastructure base against competitive reinvestment needs and capital return capacity. The stock trades at 7.6x trailing earnings with a 4.7% dividend yield, a valuation that embeds skepticism about growth durability. A 2026 outlook that signals improving free cash flow conversion or reduced capital intensity would support the bull case for multiple expansion; conversely, guidance implying heavier promotional spending or elevated capex would validate the market’s caution despite the low absolute valuation.

Consensus Estimates

The $0.47 consensus EPS sits at the low end of AT&T’s $1.97 to $2.07 FY25 adjusted EPS range, which management last reiterated in October while guiding to the higher end. That positioning creates minimal downside risk to the quarterly number but shifts the debate to whether the full-year result lands at $2.02 or closer to $2.07, a distinction that matters for how investors calibrate 2026 expectations. Revenue estimates of $32.9B imply 1.4% year-over-year growth, consistent with the pattern of low-single-digit topline expansion driven by mobility service revenue gains that partially offset wireline runoff.

Estimate momentum has been stable rather than dynamic. The four upward EPS revisions in the past 30 days came without corresponding downward moves, but the lack of broader revision activity reflects the Street’s acceptance that AT&T’s model is calibrated to steady execution within guided ranges rather than upside surprises. The revenue estimate range of $30.4B to $31.3B is unusually wide, suggesting analyst disagreement on equipment revenue timing and promotional intensity rather than service revenue trajectory.

Management Guidance and Commentary

“We are on track to deliver on our full-year 2025 financial commitments, including adjusted EPS in the range of $1.97 to $2.07, with results expected to be at the higher end of the range.”

AT&T’s October 22, 2025 guidance update positioned the company at the higher end of its FY25 adjusted EPS range, a subtle but meaningful signal that execution through the first three quarters had created room for either a strong fourth quarter or incremental investment without missing the midpoint. That framing matters because it sets $2.05 to $2.07 as the implicit target, which would require 4Q adjusted EPS of $0.48 to $0.50 if the first three quarters totaled approximately $1.59. The $0.47 consensus therefore sits slightly below the arithmetic required to hit the higher end, creating a setup where a one-penny beat would align with management’s messaging.

AT&T’s 5G and fiber infrastructure investments are central to the company’s strategy for sustainable service revenue growth.

Management’s July 23, 2025 framework update provided additional guideposts that remain relevant for the 4Q read-through. The company raised FY25 mobility service revenue growth expectations to 3%+ from prior levels and framed capital investment at $22B to $22.5B alongside low-to-mid $16B free cash flow guidance. Those parameters effectively communicated that incremental operating momentum would be reinvested in network expansion and fiber builds rather than dropping cleanly to earnings, which explains why the FY25 EPS range stayed anchored at $1.97 to $2.07 despite quarterly beats.

The gap between consensus revenue of $32.9B and the trajectory implied by management’s mobility service revenue target creates the first tension point. If mobility service revenue growth lands at 2.7% rather than 3%+, investors will question whether competitive intensity or promotional activity eroded pricing power. The second tension point is capital intensity: management has framed $22B to $22.5B capex for 2025, but any 2026 guidance that implies sustained or elevated investment would pressure free cash flow expectations and limit buyback capacity, a key component of the shareholder return narrative.

Analyst Price Targets & Ratings

Wall Street maintains a cautious stance with 47% of analysts rating shares a Hold, reflecting uncertainty about AT&T’s ability to accelerate growth while managing capital intensity. The consensus target of $29.48 implies 25.7% upside from current levels, though the wide distribution of ratings suggests disagreement about the company’s strategic direction and execution capability.

Sector & Peer Comparison

AT&T trades at a 17% discount to Verizon on trailing P/E (7.6x vs 9.1x) despite a 600 basis point profit margin advantage (17.9% vs 11.2%), a valuation gap that reflects the market’s skepticism about AT&T’s ability to convert margin strength into sustainable earnings growth. The forward P/E of 10.5x sits above Verizon’s 8.9x, indicating the Street expects AT&T’s earnings trajectory to improve modestly in 2026, but the absolute multiple remains compressed relative to historical norms, suggesting investors are pricing in execution risk or capital intensity constraints.

Earnings Track Record

AT&T’s 83.3% beat rate over the last 20 quarters and 6.1% average surprise establish a track record of modest but consistent execution above expectations. The pattern shifted in 2025, with four consecutive quarters landing “tight to tape”: a 4Q24 beat at +16.7%, a 1Q25 beat at +24.5% (inflated by accounting adjustments), a 2Q25 beat at +1.9%, and 3Q25 in-line at 0.0%. That convergence toward consensus reflects improved Street calibration of the earnings model rather than deteriorating execution, but it also removes the tailwind of repeated upside surprises that supported the stock’s re-rating in early 2025.

Post-Earnings Price Movement History

AT&T’s average next-day move of +0.5% and median move of -1.0% following earnings releases reflect muted price reactions that are more sensitive to guidance commentary than reported results. The +1.5% average move on beats is modest by sector standards, and the pattern of recent quarters demonstrates that the magnitude of the EPS surprise does not correlate reliably with stock performance.

Expected Move & Implied Volatility

The options market’s implied move of ±3.2% sits modestly above AT&T’s historical average post-earnings move of +0.5%, indicating that options traders are pricing in slightly elevated uncertainty relative to the stock’s typical muted reactions. The $22.70 to $24.20 range brackets the current $23.45 price symmetrically, suggesting the market sees balanced risk to both upside and downside scenarios rather than a directional bias.

Fiber broadband subscriber growth remains a critical metric for assessing AT&T’s infrastructure investment returns.

Expert Predictions & What to Watch

Key Outlook: Guidance Will Drive the Trade

The 4Q25 result operates as a transition event rather than a catalyst. AT&T has established credibility through consistent execution against the $1.97 to $2.07 FY25 adjusted EPS range, and the $0.47 consensus sits at a level where a one or two-penny beat would be viewed as in-line with the higher end of that range. The market’s focus will shift immediately to whether management frames 2026 as a year of improving profitability and cash generation or continued investment intensity that limits near-term earnings growth.

Key Metrics to Watch

The fiber broadband metric carries the highest weight for the forward narrative because it directly tests whether AT&T’s infrastructure investments are translating into competitive market share gains. The company has positioned fiber and 5G convergence as the strategic differentiator, so net adds materially below consensus would undermine that positioning and raise questions about the return on capital. Conversely, strong fiber performance would validate the multi-year investment thesis and support the argument that AT&T is building a durable competitive moat in broadband.

Mobility service revenue growth is the second critical metric because it determines whether AT&T can sustain topline expansion while managing the wireline decline. The 3%+ target is achievable if ARPU holds or improves, but any deceleration would force analysts to lower 2026 revenue estimates and compress the forward earnings growth algorithm. Management’s commentary on promotional intensity and churn will be scrutinized for signals about pricing power and competitive dynamics.

Free cash flow guidance for 2026 will determine the stock’s reaction more than any quarterly metric. The Street expects AT&T to generate $16B to $17B in free cash flow, and guidance at the high end of that range would support resumed dividend growth or accelerated buybacks, both of which would improve the total return profile and support multiple expansion. Guidance below $16B would raise concerns about capital intensity and limit the company’s flexibility to return cash to shareholders, reinforcing the low-growth, capital-intensive narrative that has kept the valuation compressed.