AT & T,
stocks come into force the moffettnathanso telecom analyst Craig Moffett Yesterday's closing price was well below $ 39.63, lowering its rating on Stock Retention with a new $ 30 target.
Moffett, AT & T (ticker: T) recently predicted a 1% – 2% revenue increase by 2022, and Ebitda's (35%, profit before interest, tax, depreciation and amortization) margin 352 2022 Higher than expected 2019 level. In a comprehensive research note, however, investors immediately wondered nasıl how they got there ”.
Although a 1% revenue increase doesn't seem challenging, Moffett says, the more he evaluates the facts, kadar the harder it is to imagine them achieving. Off
He sees more than one problem. For beginners, he says, "all the signs point to the wireless industry becoming more competitive." But u the real problem is about everything ”- which accounts for 60% of AT & T's revenue from other parts of the business.
Moffett said the Entertainment Group, which includes DirecTV, will start 2020 with at least 15% fewer subscribers than a year ago, as cable cuts gain momentum. Iyle With 6% ARPU growth, video revenue will start and fall from high singles from the year, yazıy he writes. “They have almost completely closed their new customer acquisition spending, so it's likely that Ebitda will drop faster than revenue unless they stay in lockout mode,” he said.
“It's going to be worse than 2021 and 2020 and worse than 2022, Geniş he says, adding that broadband subscribers have dropped. “In short, the Entertainment Group is a cancer.”
Moffett said Business Wireline's contraction was around 4%, “and margins contracted”. He stated that the problems in this chapter were secular and “it is very difficult to imagine that they can reverse these trends”. Not three years. "
He is also having trouble with WarnerMedia, which says the company's investment in HBO Max programming will be watering profits. “But let's also remember that Turner started the year on a contract basis with affiliate fees, reflecting the total decrease rate of the Pay TV industry by 3-4%, or he says. “Points among young people. Of course, 2020 will be an election year and this will help CNN. "
However, Moffett does not think that a multiplication rate in the election year rating is nearly enough to see what has improved AT & T.
Lay Collect all of this and 60% of your income is likely to remain in the middle of single. Ebitda is more likely than not to be inferior ”. Kablosuz Can wireless, representing only 40% of revenues, grow 10 times faster than in 2019 by 2020? Is it likely to become more competitive in the wireless market? "
Ardından After a strong rally (especially measured against the recent recovery in the Return of the Decade), we believe the time has come for the market to begin, as it strains AT & T's valuation and makes dividend yield less challenging. to pay attention to the basics again. "
AT&T shares were down 3.5% to $ 38.23 in recent trading.
Summer Eric J. Savitz at firstname.lastname@example.org