By George Glover
AT&T stock has traded in line with the broader market this year, but J.P. Morgan still has it down as a top pick because it says the wireless carrier is well-positioned to snatch market share from rivals.
The investment bank kept AT&T on its list of top stock picks on Monday, citing the company's investments in fiber and 5G and its marginal costs relative to rivals like T-Mobile US and Verizon Communications.
"We believe AT&T's asset mix, strengthened by years of investment in fiber and 5G, and its marginal costs relative to competitors, positions the company well to drive share gains," analyst Sebastiano Petti wrote in a research note.
AT&T said in its first-quarter earnings release last month that 45% of households with its advanced home internet services also chose AT&T wireless, excluding the new fiber customers it gained when closing its acquisition of Lumen over the quarter.
Petti said in a research note that the figure, up by three percentage points from a year ago, is a clear sign that AT&T is winning the battle for convergence, referring to when telecoms bundle 5G, fiber-optic broadband, and Wi-Fi into one offering.
The analyst raised his 2026 adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) estimate for the company to $48.1 billion, citing the growing number of converged customers, recent price hikes, and the contrbution from Lumen.
Petti expects Ebitda and free cash flow per share to rise at compound annual growth rates of 4% and 12%, respectively, through the end of 2028 as the initiatives take off.
Petti also raised his estimate for second-quarter net postpaid phone customer additions to 330,000 from 320,000. He stuck by his Overweight rating and $33 price target for the end of the year.
AT&T shares were up about 5% for the year through Friday's close, rising thanks to solid earnings report and investors piling into safer dividend stocks. The company paid a dividend of 27.75 cents a share last quarter.
The benchmark S&P 500 is up 5.8% over the same period.
Write to George Glover at george.glover@dowjones.com
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May 04, 2026 12:13 ET (16:13 GMT)
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