AT&T: Negative Takeaways From Management Comments At Citi Conference

(Preview) Company Update (T US) (Neutral)

Summary

• AT&T stock finished the week up 6.9% after executives from the three largest U.S. wireless carriers all spoke at the same conference.

• However, we believe their comments were bad news for AT&T, indicating that competition is intensifying and that AT&T may be losing ground.

• In Mobility, AT&T postpaid phone net adds were down sequentially when T-Mobile's were up; AT&T's 5G coverage will remain behind peers'

• AT&T's Consumer Wireline business, still 60% non-fiber, is at risk from T-Mobile's fixed wireless, whose net adds rose to 224k in Q4.

• At $26.29, AT&T stock has a 10%+ Free Cash Flow Yield and a 4%+ post-spin Dividend Yield, but not cheap enough to offset structural risks.

Introduction

We review our Neutral rating on AT&T after senior executives from the three largest U.S. wireless carriers all spoke at the Citigroup's AppsEconomy conference last week.

AT&T shares finished the week up 6.9%, while Verizon shares rose 4.4% but T-Mobile shares fell 5.4%. (Charter shares also fell 3.4% on …