• In the past week, AT&T reported Q2 2026 results showing revenues of US$31,558 million and net income of US$4,627 million, with earnings per share rising to US$0.66 from US$0.62 a year earlier.
• Alongside an earnings beat and strong growth in Advanced Connectivity customers, AT&T lifted its 2026 share repurchase target to about US$10 billion, underscoring management’s confidence in cash generation and the fiber‑plus‑5G convergence strategy.
• Next, we’ll examine how AT&T’s stronger-than-expected free cash flow and higher 2026 buyback target affect its existing investment narrative.

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AT&T Investment Narrative Recap

To own AT&T today, you need to believe its fiber plus 5G focus can offset legacy declines and intense wireless competition, with free cash flow funding both reinvestment and capital returns. The latest Q2 results and stronger than guided free cash flow support the near term catalyst around Advanced Connectivity execution, while competitive pressure and high capital needs remain the biggest risk. The higher 2026 buyback target marginally enhances the equity case but does not remove those underlying challenges.

The most relevant update here is AT&T’s plan to repurchase about US$10 billion of stock in 2026, up from US$8 billion previously. This sits on top of US$8.7 billion already bought back under the current authorization and signals a greater emphasis on capital returns alongside fiber and 5G buildouts, potentially reinforcing the Advanced Connectivity story if execution on subscriber quality and margins holds up.

Yet, even with higher free cash flow and buybacks, the risk that heavier capex and legacy declines squeeze cash available for dividends and debt reduction is something investors should be aware of...

AT&T’s narrative projects $136.1 billion revenue and $18.3 billion earnings by 2029. This implies 2.5% yearly revenue growth but a $3.0 billion earnings decline from $21.3 billion today.

Uncover how AT&T's forecasts yield a $29.03 fair value, a 20% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were assuming revenue of about US$139 billion and earnings near US$18.7 billion by 2029, so if you are weighing that against the recent upside surprise in free cash flow and accelerated buybacks, it is worth recognizing that these higher targets reflect a much more confident view of cost savings and convergence benefits than the baseline narrative, and the latest quarter could either reinforce or challenge those expectations.

Explore 7 other fair value estimates on AT&T - why the stock might be worth just $25.00!

Reach Your Own Conclusion

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your AT&T research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
• Our free AT&T research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AT&T's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.