AT&T ($T) recently shared its long-term projections, highlighting its commitment to return over $40 billion to shareholders while significantly expanding its fiber network to reach over 50 million locations across the United States. The telecommunications leader outlined a plan that includes shareholder returns through dividends and stock repurchases, with a notable initial $10 billion buyback authorization expected to be finalized by the end of 2026.
The company intends to sustain its annualized dividend of $1.11 per share. The goal is to enhance its national fiber network, targeting over 50 million locations by the end of 2029. This ambitious initiative comprises approximately 45 million locations achieved through organic fiber deployment, with the remainder facilitated by its Gigapower joint venture with Blackrock ($BLK) and partnerships with commercial open-access providers. "Over the last four years, we've achieved durable and profitable subscriber growth, generated attractive returns on network investment, and strengthened our balance sheet," stated AT&T Chief Executive John Stankey. On the trading front, AT&T's shares rose by 3.2% in Tuesday afternoon trading, reflecting a significant increase of around 40% in value thus far this year. The company anticipates nearly $10 billion in additional financial flexibility, which could facilitate growth investments and other strategic purposes.
AT&T plans to transition out of its legacy copper network operations across the majority of its wireline footprint by the conclusion of 2029. For 2025, AT&T expects adjusted earnings ranging from $1.97 to $2.07 per share, excluding DirecTV, with growth projected to accelerate to double-digit percentages by 2027.
From 2025 to 2027, the target is to achieve annual adjusted earnings growth before interest, taxes, depreciation, and amortization of at least 3%, alongside consolidated service revenue growth in the low-single-digit range. Additionally, annual capital investments are slated to be in the vicinity of $22 billion. Looking toward 2024, AT&T has adjusted its EPS forecast to a range of $2.20 to $2.25, increasing the lower threshold from $2.15.
Analysts surveyed by FactSet anticipate an EPS of $2.21. Full-year capital investments are projected to reach the upper end of the $21 billion to $22 billion forecast. AT&T remains on track to close the sale of its 70% stake in DirecTV to TPG by the middle of next year. Further, it anticipates free cash flow to exceed $16 billion in 2025, excluding DirecTV, with annual growth anticipated at around $1 billion, leading to projected free cash flow of over $18 billion by 2027. In a strategic move, AT&T also finalized an agreement to acquire certain spectrum licenses from US Cellular ($USM) for approximately $1.02 billion in cash..