Competitors Slowed AT&T During Fourth Quarter, but Growth Remains Solid

AT&T isn’t attracting as many wireless customers as it was a year ago, but it continues to post solid results. Customer retention was strong, but Verizon and T-Mobile seem to have effectively countered AT&T’s promotional efforts, which began in earnest about two years ago. Management expects wireless customer additions will decline in 2023 as industry growth slows from the torrid pace of the past couple years, which will benefit cash flow, but the firm also signaled that it will work to continue gaining share. We are maintaining our $25 fair value estimate and think the stock remains modestly undervalued.