AT&T announces long-term targets at investor day

Ahead of its 2024 Analyst & Investor Day presentation, AT&T unveiled a multi-year strategic plan highlighted by continued profitable 5G and fiber subscriber growth. The company said this growth is expected to fuel enhanced shareholder returns on network investments through a robust and balanced capital allocation program. AT&T expects to achieve the following 2025 and long-term financial targets through 2027. Beginning in the first quarter of 2025, and as a result of the pending disposition of its DirecTV equity method investment, the company plans to report adjusted EPS and free cash flow excluding earnings and cash flows related to DirecTV. The company continues to expect the sale of its entire 70% stake in DirecTV to TPG to close in mid-2025. Consolidated service revenue growth in the low-single-digit range annually from 2025-2027. Mobility service revenue growth in the 2% to 3% range annually. Consumer fiber broadband revenue growth in the mid-teens annually. Adjusted EBITDA growth of 3% or better annually from 2025-2027. Mobility EBITDA growth in the 3% to 4% range annually. Consumer Wireline EBITDA grows at a double-digit compounded annual growth rate through 2027. Business Wireline EBITDA declines at a low-double-digit CAGR through 2027; Business Solutions EBITDA approaching stabilization by the end of 2027. Capital investment in the $22B range annually from 2025-2027. Free cash flow, excluding DirecTV, of $16B+ in 2025, with annual growth of approximately $1B, resulting in free cash flow of $18B+ in 2027. In addition, AT&T expects to receive $5.4B of after-tax cash payments in 2025 and $0.5B in 2029 related to the sale of the DirecTV investment. Adjusted EPS, excluding DirecTV, of $1.97 to $2.07 in 2025, accelerating to double-digit percentage growth in 2027. $3V+ in run-rate cost savings by the end of 2027, inclusive of the company’s target of achieving $2 billion+ in run-rate cost savings by mid-2026. The company said, “With the plans announced today, the Company will unlock new capabilities that further its momentum while investing in future growth – ultimately enabling more robust shareholder returns. As a result of continued investment, the Company expects to be in a differentiated position within the connectivity industry by the end of the decade. In Mobility, the Company is building a more efficient, high-capacity, programmable and open network. By 2027, it expects to have largely completed the modernization of its 5G wireless network with open technology, with deep mid-band 5G spectrum covering 300 million+ people by the end of 2026. This network will support super-fast download speeds and serve as a platform for new product and GenAI innovation. In broadband, the Company is creating even more distance between itself and the competition on what is already the largest fiber broadband network in America. By the end of 2029, it expects to reach 50 million+ total locations with fiber. This includes expectations to pass about 45 million locations through its organic fiber deployment and serve 5 million+ fiber locations through Gigapower, its joint venture with Blackrock, as well as through agreements with commercial open-access providers. The Company’s fiber expansion will greatly increase its opportunity to serve customers how they want to be served, by one provider in a converged manner. While building the network of the future, the Company is actively working to exit its legacy copper network operations across the large majority of its wireline footprint by the end of 2029. The Company believes sustaining industry-leading levels of network investment and pursuing these strategic objectives will ultimately allow it to offer the best value, greater personalization and security and more customer-centric products and services on the largest, highest-capacity, lowest-marginal cost network in America.”