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.
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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.
