AT&T (T) could dial up growth on several fronts over the next three years, says CEO John Stankey.
And if incoming President Donald Trump could help, all the better.
“If I go back to the last Trump administration, certainly from a tax policy perspective, it was pro-growth and pro-investment,” Stankey said on Yahoo Finance’s Market Domination (video above). “We invest sometimes between $24 to $25 billion a year the last couple of years, $22 billion moving forward.”
Stankey says the company has pulled back a bit on investments as provisions under the previous Trump tax laws start to sunset.
“If the administration leans into that play again and reinstitutes some of that, we will probably build fiber a bit faster than what we communicated yesterday [at our investor day] with some of that extra cash that we’d have laying around,” Stankey added.
At a closely watched investor day Tuesday afternoon, AT&T pitched the potential for $40 billion in stock buybacks and dividends from 2025 to 2027. To make it rain for shareholders, AT&T execs are betting that investments in 5G infrastructure and fiber will yield a quicker pace of sales and earnings growth than seen in 2024.
The company has not baked any tax cuts into its guidance.
“We have the nation’s largest fiber footprint. We’re growing that footprint rapidly. And we think that since those are the forward-leaning technologies of the future, if you have more of it than everybody else and you get it out there faster than everybody else … you’re going to end up meeting more customer needs faster than anybody else,” Stankey said.
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More than $40 billion expected to be returned to shareholders over the next three years via stock buybacks and dividend.
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Current dividend of $1.11 per share is being maintained. AT&T’s dividend yield is 4.89%.
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Consolidated service revenue growth in the low-single-digit range annually from 2025-2027.
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Adjusted operating profit growth of 3% or better annually from 2025-2027.
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Adjusted EPS of $1.97 to $2.07 in 2025, accelerating to double-digit percentage growth in 2027.
“We view AT&T’s analyst day positively and better than the expectations,” said KeyBanc Capital Markets analyst Brandon Nispel. “From our standpoint, it’s now clear why the stock has outperformed Verizon (VZ) this year. Going forward, it is now about execution of the 5G/Fiber build and copper network cost takeout efforts.”
Nispel maintained a Sector Weight rating on AT&T shares. Yahoo Finance’s analyst recommendation tool shows an almost even split on the Street between Buy and Hold ratings on AT&T.
