Just caught up on AT&T's earnings and there's actually an interesting story developing here with their fiber and 5G strategy.

So AT&T reported Q1 results on April 22nd - beat expectations with $0.57 EPS versus $0.55 consensus, and revenue came in at $31.51 billion, up 2.9% year-over-year. Solid execution. But what really stands out is how their convergence play is actually working. Get this: 45% of their advanced home internet customers also subscribe to AT&T wireless. That's up three percentage points from last year. This matters because it shows the bundling strategy of combining 5G, fiber, and Wi-Fi into one package is actually sticking with customers.

J.P. Morgan analyst Sebastiano Petti kept AT&T on the top picks list, and honestly the reasoning makes sense - they've got structural advantages in fiber buildout and 5G deployment compared to rivals, plus a better cost position. He bumped up the 2026 EBITDA estimate to $48.1 billion based on the convergence momentum and recent price increases. The $33 year-end price target stayed intact.

From a cash flow perspective, Petti's projecting EBITDA and free cash flow per share growing at 4% and 12% compound annual rates through 2028. The dividend yield sits around 4.2% right now with a 37.25% payout ratio, so there's room for growth without cutting into shareholder returns.

Looking at the broader analyst consensus, thirteen out of twenty-one analysts have a Buy rating, with a consensus price target of $30.55. Citigroup recently raised their target to $31.50. The stock itself is up about 5% year-to-date and trading between a 50-day moving average of $27.52 and a 200-day of $26.05.

What's worth monitoring is whether they can keep converting those fiber customers into wireless subscribers. If that 45% number keeps climbing, the t stock could see more upside as the market recognizes the durability of their revenue model. This convergence narrative is probably one of the more underrated angles in telecom right now.