Analysts at Pacific Crest upgraded AT&T from Hold to Buy, citing a 12% year-over-year increase in full-year adjusted EPS and a 3.7% rise in Q4 revenue to $33.5 billion, which exceeded consensus forecasts by over $650 million. The upgrade highlights AT&T’s ability to deliver consistent cash flow despite modest postpaid phone additions of 421,000 and fiber subscriber growth of 283,000, figures that were slightly below peer averages but offset by robust margin expansion in its wireless segment.

In the fourth quarter, AT&T reported mobility service revenues of $17.0 billion, up 2.4%, while consumer wireline revenues ticked up 13.6% year-over-year to $2.2 billion. Although postpaid phone net additions and broadband subscriber gains trailed guidance by roughly 5%, adjusted operating income rose to $6.1 billion, marking an 11% improvement and driving a 15% year-over-year jump in free cash flow to $4.2 billion.

Management accelerated capital expenditures to $7.1 billion in Q4, targeting fiber expansion in three new metropolitan areas and enhancing 5G capacity in 15 existing markets. The company also reduced net debt by $2.4 billion during the quarter, bringing the total net-debt-to-EBITDA ratio down to 2.6x. AT&T reaffirmed plans to return over $45 billion to shareholders from 2026 through 2028 via dividends and share repurchases, representing approximately 60% of forecasted free cash flow.

Looking ahead, AT&T projects adjusted EBITDA growth of 3%–4% in 2026, accelerating to at least 5% by 2028, driven by its Advanced Connectivity segment, which accounted for 90% of 2025 revenue. The company forecasts double-digit EPS compound annual growth through 2028, with free cash flow rising from $18 billion in 2026 to $21 billion by 2028. Leadership noted that recent acquisitions of Lumen’s consumer fiber assets and EchoStar spectrum licenses will contribute roughly 100 basis points of service revenue growth in 2026.