Former Dividend Aristocrat AT&T Posts Strong Earnings, Tries to Win Back Investors

Key Points

• AT&T outperformed analyst expectations with an 11% year-over-year increase in adjusted EPS and record results in fixed broadband and fiber net adds.
• The company is aggressively expanding its fiber footprint through the acquisition of Lumen Technologies’ fiber business and is poised to offer direct-to-device satellite broadband via a partnership with AST SpaceMobile.
• Wall Street is turning increasingly bullish, evidenced by rising price targets, zero Sell ratings, and significant institutional buying.

It’s not often that a 141-year-old company has the opportunity to generate excitement. But after AT&T NYSE: T reported Q1 2026 earnings on April 22, that is exactly how the market has been reacting.

After initially selling off in the lead-up to its earnings call, the stock gained nearly 3% on April 23 as investors responded positively to a Q1 acquisition, the company reiterating guidance after posting record fixed broadband results, and a nearly 11% year-over-year increase in adjusted earnings per share (EPS).

In doing so, the communication services fixture appears to once again find itself in the favor of Wall Street, with improving price targets and increased institutional buying signaling bullish momentum.

For income investors or those looking for value in telecommunications, here’s what you need to know.

After a Troubling Run, The Tide Is Shifting

Shares of T have gained nearly 16% from their year-to-date low, which has been a welcome reprieve for shareholders who endured a more than 22% loss from the stock’s one-year high in Sept. 2025. And despite only posting one earnings miss in the past nine quarters, AT&T entered 2026 basically flat over the past five years.

During that time, the company lost its status as a Dividend Aristocrat in February 2022 after spinning off its WarnerMedia division.

While that wasn’t welcome news for income investors, the stock had already fallen on tough times before the spinoff.

From its February 2020 high through its current five-year low in August 2023, AT&T fell by more than 50%.

Despite not planning any dividend increases through at least 2027, the stock continues to attract investors along its road to recovery.

It still yields about 4.2%, and since its five-year low, AT&T has enjoyed a more than 86% gain, with shares trading not far off of their 52-week high of $29.79.

Meanwhile, the company’s strategic partnership with AST SpaceMobile NASDAQ: ASTS—which it signed in 2024—may finally be on the verge of bearing fruit. On April 22, AST SpaceMobile was granted approval by the U.S. Federal Communications Commission to deliver nationwide, direct-to-device (D2D) cellular broadband from space.

The agreement between the two companies calls for providing space-based cellular broadband directly to everyday, unmodified AT&T mobile devices. In his earnings call comments, CEO John Stankey said that the company’s “customers are going to want [D2D space-based broadband], and I think it's natural that we work with [low Earth orbit] providers that have the capabilities to solve that problem, to integrate those offerings into our services.”

Q1 Takeaways: AT&T Had Plenty to Highlight

Adding to that momentum, AT&T posted a top- and bottom-line beat when it reported Q1 results.

EPS of 57 cents topped analyst expectations for 55 cents, while quarterly revenue of $31.51 billion topped the $31.29 billion consensus.

Notably, the company reported a record first-quarter consumer fixed broadband result, with 584,000 fiber and fixed wireless advanced internet net adds. It also added 1.1 million customers and approximately 4 million fiber locations when it closed a deal in Q1 to acquire Lumen Technologies’ NYSE: LUMN Mass Markets fiber business. That acquisition is expected to add around 8 million incremental fiber locations in 2026, and more than 60 million by 2030.

AT&T finished Q1 with $12 billion in cash and cash equivalents, and returned $4.3 billion to shareholders during the quarter, between $2 billion in dividend distributions and $2.3 billion in share repurchases under a buyback authorization that dates back to 2024.

Management reiterated full-year and long-term guidance, including free cash flow of more than $18 billion in 2026, more than $19 billion 2027, and more than $21 billion in 2028, alongside adjusted EPS of $2.25 to $2.35 this year, with a double-digit, three-year compound annual growth rate through 2028.

Despite the strong EPS growth, the stock can still be viewed as undervalued as it is currently trading at a forward price-to-earning multiple of around 11.5x, which aligns with an earnings growth forecast of 10.04% over the next year.

Wall Street Sentiment Is Slowly Shifting

For the past year, AT&T has maintained a consensus Moderate Buy rating.

But over that time, there has been a palpable shift in sentiment. As of today, none of the 22 analysts currently covering the stock have assigned it a Sell rating.

And, over the past month, the average 12-month price target has increased from less than 6% to more than 17%.

Meanwhile, institutional buyers have outnumbered sellers for the past six quarters. Over the past year, inflows of nearly $24 billion have surpassed outflows of just over $10 billion. Short interest has ticked up but only represents 1.69% of the float.

Based on the company’s financial health, the stock re-entered the TradeSmith Green Zone six days ago, and AT&T's MarketRank™ is currently scores higher than 96% of the companies evaluated by MarketBeat, and it is ranked 41st out of 629 stocks in the computer and technology sector.