AT&T (NYSE:T) Gains as Outage Compensation Meets Advocate Scrutiny
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AT&T (NYSE:T) Gains as Outage Compensation Meets Advocate Scrutiny

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Consumer advocates take a second look at AT&T’s refund plans.

The massive network outage that hit AT&T (NYSE:T) customers just a week ago left a lot of damage in its wake, and the telecommunications company’s attempt to paper over the matter with a small refund left a lot of users cold. In fact, consumer advocates promptly took to the standard channels to suggest just what AT&T customers should do instead. Investors, meanwhile, seemed all right with this, and sent AT&T stock up modestly in Wednesday afternoon’s trading.

AT&T’s plan to offer $5 credits to every impacted user hasn’t exactly been a popular one. But customer service advocates are actually suggesting that customers shouldn’t wait for the service provider to make an offer. Rather, they should quickly ask for reimbursement on their own. Businesses generally don’t give refunds for service outages like this on their own; customers have to apply for it. AT&T’s $5 credit may not sound like much, but AT&T notes that it’s the estimated cost for one day’s service.

The Timing Is Lousy

It’s never really a good time for a mobile service provider to suffer a widescale power outage, but this was a particularly bad time. The outage comes just days before AT&T will hit customers with the first in a series of rate hikes. The first to see rates climb will be some older unlimited plans, which will see AT&T hike prices by $0.99 per month, per line, for several of its unlimited and “value” plans. However, the price hike won’t be just a raw charge; extra benefits will be included, like more hotspot data or potentially more lines.

Is AT&T a Buy, Sell, or Hold Today?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on AT&T stock based on eight Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 2.72% loss in its share price over the past year, the average AT&T price target of $20.32 per share implies 19.53% upside potential.



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