AT&T Shares Navigate a Landscape of Contrasts

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AT&T finds itself in a curious position, simultaneously bolstered by competitive and customer service victories while facing significant market headwinds and analyst caution. The telecommunications giant's current narrative is one of stark contrasts.

The prevailing sentiment among market researchers remains cautious. Illustrating this point, Wolfe Research adjusted its rating on AT&T shares this past Monday, moving from "Outperform" to "Peer Perform." The firm cited a more challenging phase for the sector, marked by rising customer turnover and a softer projected outlook for average revenue per user (ARPU) heading into 2026. The company's next major test is scheduled for January 28, 2026, when it reports quarterly earnings. Current estimates point to a nearly 15 percent decline in profit compared to the same period the prior year.

Trading at €20.79 on Wednesday, the equity has shed more than 6 percent of its value over the preceding 30 days, placing it well below its 52-week peak. Despite these pressures, the board of directors has reaffirmed its commitment to shareholder returns, declaring the next quarterly dividend.

Positive Developments: Legal and Customer Recognition

Amid the challenges, AT&T has secured notable wins. In a significant legal development, a federal judge in Texas issued a preliminary injunction against rival T-Mobile US on Wednesday. The order prohibits T-Mobile from using its "Easy Switch" application to access data from AT&T's systems. The court found a substantial likelihood that AT&T would ultimately prevail in the main case and recognized the potential for harm from T-Mobile's actions.

Concurrently, the company's service quality received external validation. For the third consecutive year, J.D. Power ranked AT&T first in customer satisfaction for wireline internet service in two separate U.S. regions. These events highlight the firm's dual focus on defending its competitive position and maintaining service standards.

Strategic Moves and Lingering Liabilities

On the strategic front, AT&T continues to push forward with its long-term growth plan, which hinges on substantial capital expenditure to expand both its 5G and fiber-optic networks. The objective is to pass more than 60 million residential and business locations with fiber by the end of 2030. The company has also recently obtained regulatory clearance for its acquisition of certain assets from UScellular.

However, a separate issue from the past continues to cast a shadow. Wednesday, December 18, marked the deadline for customers to file claims related to a class-action settlement stemming from two data security incidents that occurred in 2024. The total settlement fund for these breaches amounts to $177 million.