AT&T heads into its July 22 earnings report with a notable split: the Street has been trimming price targets while options traders have moved to their most call-heavy stance in months.
The options signal is the sharpest near-term development. The put/call ratio has dropped to 0.71, more than two standard deviations below its 20-day average of 0.76 — the most bullish options skew AT&T has seen in the past year relative to its recent baseline. That diverges meaningfully from the analyst community, which has spent the past two weeks cutting targets. Morgan Stanley lowered its target from $30 to $25 while keeping an Overweight rating. Wells Fargo initiated with an Underweight and a $18 target — well below the current price of $21.81 — and Barclays trimmed from $26 to $24. The consensus mean target sits at $29.21, implying roughly 34% upside, but the recent direction of travel has been firmly downward. That creates an unusual tension: options traders are leaning into upside, while the analysts covering the stock are becoming more cautious.
The bull case rests on AT&T's wireless franchise — 74 million postpaid phone customers generating close to 70% of revenue — and the potential for converged services to drive EBITDA growth of 6% this year. Bears focus on the pressures bearing down on that same wireless business: ARPU erosion, a legacy segment heading toward negative EBITDA contribution post-2027, and a dividend payout ratio expected to remain above 100% through at least 2028. Oppenheimer downgraded the stock in early June, citing these structural headwinds. The stock trades at roughly 9x earnings and 6.4x EV/EBITDA, which keeps valuation from being a clear obstacle in either direction.
Short positioning has continued the rebuild noted earlier this week, rising a further 1.5% on the day to 121 million shares, or 1.7% of the free float — a partial reversal of covering that dominated June. The absolute level remains low. More telling is the lending market: availability is extraordinarily loose at nearly 7,900% of short interest, meaning shares available to borrow dwarf the current short position by a factor of roughly 79. Cost to borrow is a negligible 0.37%. There is no squeeze dynamic here, and no friction for would-be shorts — the positioning picture looks more like light tactical repositioning than a structural bear thesis building.
The July 22 print will test whether AT&T's wireless revenue trajectory and free cash flow guidance can justify a stock that options traders are quietly backing, even as the analysts who cover it most closely keep lowering the bar.
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