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blue-chip

3 US-Listed Stocks Under Investor's Radar - T, NTGR, DSP

Dec 08, 2021 | Team Kalkine
3 US-Listed Stocks Under Investor's Radar - T, NTGR, DSP

AT&T Inc.

T Details

AT&T Inc. (NYSE: T) is a holding corporation that operates in the telecommunications, media, and technology industries worldwide through its subsidiaries and affiliates. Its business segments include 1) Communications, which includes the Mobility, Business, and Consumer Wireline business units in the United States and globally; 2) WarnerMedia, which produces and distributes films, television, gaming, and other content in both physical and digital formats globally; and 3) Latin America, which provides entertainment and wireless services in Latin America and the Caribbean (under Vrio) and Mexico. As of December 07, 2021, the company's market capitalization stood at USD 166.24 billion

Latest News:

  • New Contract: The Defense Information Systems Agency selected AT&T for the Enterprise Infrastructure Solutions (EIS) Task Order to Modernize the United States Coast Guard's (USCG) Data Network on December 07, 2021. If all options are exercised, the deal with AT&T is worth USD 161 million over 11 years.
  • Shareholder Updates: The company updated that the sustainability of its wireless momentum was attributed to several factors, including a rising share in previously underpenetrated segments of the market, improved customer experience, and its simplified and consistent go-to-market strategy UBS Global TMT Conference on December 06, 2021. In the future, the business expects its postpaid phone ARPU to remain stable at 2021 levels in 2022. Furthermore, the company is confident in its fiber construction strategy.

9MFY21 Results:

  • Slight improvement in Revenues: Total operating revenues climbed 1.46% to USD 127.91 billion during 9MFY21 (ended September 30, 2021) from USD 126.07 billion during 9MFY20, owing to greater Mobility equipment and service revenues and gains in broadband service in its communications segment.
  • Surge in Bottom Line: It witnessed an increase in net income to USD 16.09 billion during 9MFY21 from USD 9.69 billion reported during 9MFY20.
  • Decent Balance Sheet: As of September 30, 2021, the company's cash and cash equivalents stood at USD 21.27 billion, with a total debt of USD 180.60 billion.

Key Risks:

  • Spectrum Risk: Any potential changes to the electromagnetic spectrum currently used for broadcast television and satellite distribution by the Federal Communications Commission (FCC) could jeopardize WarnerMedia's ability to deliver linear network feeds of its domestic cable networks to its affiliates, which might, in turn, affect its financial strength and cash flows.

Outlook:

  • FY21 Estimates: The company indicated in its Q3FY21 press release that it anticipates FY21 EPS to grow at the high end of the low- to the mid-single-digit range and that it is on pace to meet its free cash flow target of USD 26 billion. The business aims to exceed the 70-73 million HBO Max/HBO global subscription target set for FY21.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

  • % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.