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AT&T Wins $9B of 5G Spectrum – Report

AT&T (T) won big at the just-concluded Federal Communication Commission (FCC) 5G spectrum auction of 3.45GHz band spectrum. Reuters reports that the wireless company won $9 billion in bids.

AT&T is a holding company specializing in providing telecommunications, media, and technology services.

Spectrum Auction of FCC

Weminuche LLC followed AT&T closely with $7.3 billion worth of bids, and T-Mobile (TMUS) won $2.9 billion worth of the 3.45 GHz band spectrum. United States Cellular (USM), on the other hand, won $580 million in bids. The entire auction ended up generating $22.5 billion.

According to the FCC, more than one-third of the top 100 markets placed at least four winning bids. Consequently, the broad range and distribution of winning bidders should go a long way in strengthening competition and diversity in the wireless business.

The Chairwoman of FCC, Jessica Rosenworcel, expects the commercial use of the new spectrum to play a key role in strengthening America’s leadership in 5G, while enabling economic recovery.

Analysts’ Take

Last week, UBS analyst John Hodulik reiterated a Buy rating on AT&T stock with a share price target of $26.45, which implies 2.69% downside to current levels. According to the analyst, the proposed sale of Warner Media in early Q2 will leave the company leaner and a more focused entity, able to invest in its core connectivity business. Last year, AT&T reached a deal to combine its content unit, WarnerMedia, with Discovery Inc. (DISCA), through which it would receive $43 billion in a combination of cash and retention of some debt.

Consensus among analysts is a Moderate Buy based on 5 Buys and 4 Holds. The average AT&T price target of $28.72 implies 5.67% upside potential to current levels.

T scores 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.

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