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AT&T and Verizon Poised for Growth Amid Competitive Market

Stock surge anticipated for AT&T due to strategic shifts. Verizon also shows potential for EPS growth as both navigate competitive challenges.

Date: 
AI Rating:   7

Key Growth Factors for AT&T and Verizon

The report highlights three main factors contributing to AT&T's stock price increase, which has risen nearly 50% over two years. These factors include:

  1. AT&T's divestiture of media assets, which reduces expenditure.
  2. Expansion of its fiber optic and 5G networks leading to increased subscriber growth.
  3. The shift in investor preference towards safer dividend stocks due to economic uncertainties.

Earnings Per Share (EPS)

Analysts predict AT&T's EPS will grow at a compound annual rate of 19% from 2024 to 2027. This level of growth is significantly positive as it indicates strong performance potential in expanding higher-margin businesses.

Verizon's Situation

Verizon seems to be stabilizing its wireless business, expecting an EPS growth rate of 7% over the same period. Its strategies involve localized marketing and competitive pricing, positioning it positively in a challenging market, albeit with slower growth than AT&T.

Comparative Valuation Insights

AT&T is trading at 12 times this year's earnings, while Verizon is at a lower 9 times with a higher dividend yield of 6.2%. This indicates that Verizon could be a more attractive option, yet both companies are expected to remain appealing to dividend-seeking investors.

Micron Technologies Outlook

Micron Technologies is set to see significant growth, with estimates suggesting a 20% revenue growth and a staggering 151% EPS growth from fiscal 2024 to 2027. These figures reveal a very optimistic forecast for the semiconductor sector, driven by renewed demand for memory chips in PCs and smartphones.

Overall, the stocks of AT&T, Verizon, and Micron look to be positioned well for value plays in the upcoming years, making them noteworthy considerations for investors in a fluctuating market.

Stocks:  T VZ MU