Telecom giant AT&T (NYSE:T) is exploring a sale of its cybersecurity business and has been working with Barclays Plc to solicit potential bids, Reuters reported. The company’s cybersecurity business includes AlienVault, which was acquired in 2018 for $600 million to attract new clients and retain existing customers.
However, the rationale for the acquisition has eroded as several cybersecurity players that can offer cheaper products and solutions have emerged since then. AT&T has divested several businesses over recent years to streamline its operations and pay down its huge debt amassed due to the acquisition of Time Warner in 2018.
AT&T spun off its interest in Warner Media business for $40.4 billion in cash and merged it with Discovery to form Warner Bros Discovery Inc. (WBD). The company also sold a 30% stake in its pay-TV unit DirecTV to private equity giant TPG for $1.8 billion.
The company’s efforts have been working: AT&T reduced its net debt by nearly $24 billion to $132.2 billion in 2022. The company aims to strengthen its balance sheet by further lowering its net debt to about $100 billion by 2025. Like several other companies, AT&T is streamlining its operations and reducing costs, given persistent macro challenges. The company recently assured investors that it is on track to achieve its “$6 billion plus cost savings run rate” by the end of this year.
Is AT&T a Buy, Sell, or Hold?
Wall Street is cautiously optimistic about AT&T, with a Moderate Buy consensus rating based on five Buys, eight Holds, and one Sell. The average AT&T stock price target of $21.82 implies 13.6% upside. Shares have risen 4% since the start of this year.
