Telecommunications major AT&T Inc. (T) announced that it has partnered with a fellow telecommunications company, Frontier Communications, to provide fiber-optic connectivity to enterprises that do not use services provided by AT&T.
Notably, multi-year strategic agreements for the deployment of AT&T’s 5G mobility network were also signed between the companies.
Following the news, shares of the company appreciated marginally to close at $27.33 in extended trade on Wednesday.
By developing additional fiber, AT&T aims to reach about 2.5 million incremental customer locations by the end of 2021 and 30 million locations by the end of 2025. With Frontier by its side, AT&T will be able to offer large enterprise customers high-speed, low-latency and highly secure connectivity in markets where it does not own a fiber network or is currently planning to set up one. Also, AT&T will tap Frontier’s ethernet capabilities to strengthen connectivity between cell towers and the core network.
The President of Network Engineering and Operations at AT&T, Scott Mair, said, “As demand for broadband connectivity grows, we will be able to plug and play into Frontier’s network to support businesses and help grow our 5G mobility network for consumers.” (See AT&T stock chart on TipRanks)
Recently, LightShed Partners analyst Walter Piecyk initiated coverage on the stock with a Buy rating. The analyst’s price target of $36 implies upside potential of 31.8% from current levels.
According to the analyst, the company’s wireless and fiber network capabilities are not being properly recognised by the market. Also, the analyst believes that share repurchases by the company in the near future cannot be ruled out.
The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 5 Buys, 5 Holds and 1 Sell. The average AT&T price target of $32.33 implies that the stock has upside potential of 18.4% from current levels.
AT&T scores a 6 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations. Shares have declined about 5.2% over the past year.