AT&T Shares Drop After Oppenheimer Downgrade and Pricing Simplification
T•AT&T shares fell sharply after Oppenheimer cut its rating to perform and warned the fiber buildout may reach only 50 million homes versus the 60 million target. The company also rolled out simplified home internet pricing as SpaceX’s Starlink intensifies competition in broadband.
1. Analyst Downgrade
Oppenheimer moved AT&T to a perform rating, citing valuation concerns and a potential broadband growth slowdown after flagging a reduction in fiber buildout projections to 50 million homes from 60 million. This shift from buy to perform intensified selling pressure on shares.
2. Competitive Broadband Pressure
SpaceX’s Starlink network is rapidly expanding its low-Earth orbit broadband service, offering global coverage at lower infrastructure cost and positioning itself as a formidable rival to AT&T’s legacy and fiber-based internet services.
3. Fiber Buildout Shortfall
AT&T’s fiber roll-out, initially targeting 60 million passings this year, is now projected to reach only 50 million homes, raising questions about execution speed, capital allocation and the timeline for broadband revenue growth.
4. Pricing Simplification
The company unveiled a streamlined home internet pricing structure, reducing plan complexity to attract and retain customers, though its impact on average revenue per user and subscriber churn will need close monitoring.
