JPMorgan raised its forecast for new AT&T ( T ) postpaid subscriptions in the second quarter to 275,000 from a previous forecast of 250,000, according to a report on Thursday. This adjustment is due to reduced customer turnover.
“We have adjusted our financial forecasts for the AT&T Mobility division ahead of the second quarter earnings report, taking into account the company’s recent public discussions and the establishment of annual financial targets,” financial analysts said.
While the market for new postpaid phone subscriptions has returned to normal, the bank raised its forecast as the customer churn rate fell to 0.72%, while the number of customers switching providers remained unchanged.
“Additionally, we expect AT&T to continue to prioritize the acquisition of profitable new postpaid subscriptions, with new subscriptions expected to be 8% lower year-over-year (compared to an 11% year-over-year decline). first quarter of 2024),” the report continues.
Despite declining business (reduced customer turnover and fewer improvements) and modest growth in postpaid phone subscribers, JPMorgan maintained its Mobility division’s earnings before interest, taxes, depreciation and amortization (EBITDA) of $9.20 billion, higher than average market forecast. However, the bank also lowered its forecast for the handset renewal rate for the second quarter of 2024 to 2.8%.
The financial institution emphasized that AT&T is a preferred investment choice due to the steady growth of Internet and fiber telephony subscriptions, as well as improving profit margins and free cash flow. He reaffirmed a positive Overweight rating on AT&T and maintained his price target on the company’s stock at $21.
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