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- T stock prices have been recently hammered by the AMZN market rumors, triggering highly attractive entry points for income-seeking investors.
- AMZN may eventually introduce a MVNO strategy at a break-even price of $10, similar to other asset-light players such as Mint Telecom and Consumer Cellular.
- While no one knows what will happen in the far future, it is unlikely that the e-commerce giant will enter this space for now, with representatives already debunking the speculation.
- However, T may continue their underperformance ahead, due to their elevated capex and long-term debts.
- Therefore, while we rate both T & VZ stocks as great buys at these depressed levels, investors that dollar cost average here must also adjust expectations accordingly.
We have previously covered AT&T Inc. (NYSE:T) in April 2023 here. At that time, the stock has been wrongfully sold-off, since its free cash flow generation has always been lumpy, depending on the timing of cash distributions, capital expenditures, and cash paid for vendor financing.
Given the optimistic signs of operating cost optimization and improved profitability, we believe the telecom may potentially achieve its ambitious FCF generation of $16B in 2023. With the stock already overly sold off due to the Amazon (AMZN) rumor, we are cautiously rerating the T stock as a Buy here.
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