AT&T reported on July 22 with the stock up 4.6% on the week to $22.26 — and the options market, which had been leaning bullish ahead of the print, has now delivered its most call-heavy reading of the past year.
The options signal has extended rather than faded. The put/call ratio hit 0.69 on Tuesday, nearly three standard deviations below its 20-day average of 0.76 — the lowest defensive reading in twelve months. This is a meaningful sharpening from the pre-earnings note, which flagged 0.71 as already extreme. Options traders were positioned for upside, and the week's 4.6% gain vindicated that stance. Closest peer VZ added 3.1% on the week, making AT&T a modest outperformer in the space. European telecom peers fared worse: ELISA fell 7.6% and KPN dropped 2.3%, suggesting the AT&T-specific move had more to do with the earnings print than sector-wide rotation.
The Street's direction of travel remains downward on price targets despite the pop. RBC Capital lowered its target from $31 to $27 on July 20, keeping an Outperform rating. Scotiabank trimmed from $31 to $29.25 a week earlier. Both are still above the current $22.26 price. The consensus mean target is $28.90, implying 30% upside from here — but the recent pattern is one of targets compressing toward the stock rather than the stock closing the gap. Wells Fargo's $18 Underweight initiation anchors the bear camp, flagging ARPU pressure and a payout ratio expected to run above 100% through at least 2028. Bulls counter with the converged services story: 74 million postpaid customers, EBITDA growth projected at 6% in 2026, and free cash flow supported by the DirecTV divestiture. The P/E multiple has edged up to 9.1x on the week's gain, and EV/EBITDA is running near 6.4x — inexpensive on either measure, though the bear case questions whether those multiples are warranted given the legacy copper headwind.
Short positioning has barely moved since the pre-earnings rebuilding trend noted in the prior note. Short interest ticked up another 2% on Tuesday to 124 million shares, or 1.75% of the free float — the highest reading since mid-June. That said, at under 2% of float, this remains a lightly shorted stock in absolute terms. The lending market is as loose as it gets: availability has eased somewhat but remains at roughly 7,550% of short interest, meaning the pool of shares available to borrow is enormous relative to what is actually being borrowed. Cost to borrow has drifted lower over the month to 0.28%, down 41% from a month ago even after a slight weekly uptick. There is no squeeze pressure here. Short sellers face zero friction adding to positions if they choose to, which likely explains why a modest rebuilding has happened without any sign of stress.
The institutional holder picture is dominated by index money — BlackRock at 8.1% and Vanguard entities collectively near 8.5% of shares outstanding — with active managers showing incremental interest. Capital Research added roughly 64 million shares in the last reported period, and JP Morgan Asset Management added 35.6 million. These are large absolute numbers but modest as a percentage of AT&T's total float, consistent with the stock's role as a yield-and-stability holding rather than a high-conviction active bet.
The next catalyst to monitor is management's commentary around the pace of legacy copper wind-down and any revision to the 2026 EBITDA growth guidance, given that the bear case hinges almost entirely on how fast that headwind accelerates beyond 2027.
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