AT&T (T) Stock Forecast & Price Target

AT&T is benefiting from a convergence-led strategy that is driving higher wireless and broadband subscriptions even as ARPU is temporarily traded for growth, with 42.8% of customers now converged and 6.3 million converged accounts supporting stickier relationships and lower churn. Wireless remains the core engine at about 70% of revenue, while fiber and advanced connectivity are scaling quickly through 17 million residential broadband customers, more than 60 million homes passed, and continued momentum in business fiber and 5G services. Financially, the company’s 2026 outlook of 5%+ advanced connectivity service revenue growth, 6%+ EBITDA growth, $18B+ FCF, and $2.40 adjusted EPS, along with the sale of its 3%-of-revenue Mexico business, reinforces improving earnings quality and capital flexibility.

AT&T is facing a cautious outlook because its core wireless business, while still dominant at about 70% of revenue and serving 75 million postpaid plus 16 million prepaid customers, is under pressure from rising customer acquisition costs, higher churn, and heavier upfront handset spending. Although 3Q26 revenue and EBITDA were better than expected, the company’s guidance reflects increasing 2027+ free-cash-flow strain from higher interest expense, working-capital needs, $800 million of cash severance, and the loss of Mexico, which contributes only 3% of revenue but about $400-500 million of annual FCF. The 13% enterprise segment and 12% residential broadband base provide diversification, yet persistent fiber ARPU declines, aggressive promotions, and a tougher competitive backdrop make it difficult to view the fundamentals as improving enough to offset these cash-flow headwinds.