DCF Studio

    T · NYQ · Communication Services

    AT&T Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 40.19

    Market price

    USD 21.44

    Implied upside

    +87.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 40.19+87.4%
    Exit multiple
    USD 26.21+22.3%
    Market price
    USD 21.44

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn10bn21bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 129.9bnUSD 130.0bnUSD 130.4bnUSD 131.2bnUSD 132.4bnUSD 134.1bnUSD 136.2bnUSD 138.7bnUSD 141.8bnUSD 145.3bn+1.3%
    EBITUSD 25.6bnUSD 25.6bnUSD 25.7bnUSD 25.8bnUSD 26.1bnUSD 26.4bnUSD 26.8bnUSD 27.3bnUSD 27.9bnUSD 28.6bn+1.3%
    NOPATUSD 20.2bnUSD 20.2bnUSD 20.3bnUSD 20.4bnUSD 20.6bnUSD 20.8bnUSD 21.2bnUSD 21.6bnUSD 22.0bnUSD 22.6bn+1.3%
    Add depreciation & amortisationUSD 20.7bnUSD 20.7bnUSD 20.8bnUSD 20.9bnUSD 21.1bnUSD 21.4bnUSD 21.7bnUSD 22.1bnUSD 22.6bnUSD 23.1bn+1.3%
    Less capital expenditureUSD -20.8bnUSD -21.3bnUSD -21.8bnUSD -22.4bnUSD -23.1bnUSD -23.9bnUSD -24.7bnUSD -25.7bnUSD -26.7bnUSD -27.9bn+3.3%
    Capex, % of revenue16.0%16.4%16.7%17.1%17.4%17.8%18.1%18.5%18.9%19.2%-
    Less increase in working capitalUSD 566.6mUSD 1.2mUSD 54.6mUSD 108.3mUSD 162.9mUSD 218.8mUSD 276.7mUSD 336.9mUSD 400.3mUSD 467.3m+2.1%
    Free cashflow to firmUSD 20.7bnUSD 19.7bnUSD 19.3bnUSD 19.0bnUSD 18.8bnUSD 18.6bnUSD 18.4bnUSD 18.3bnUSD 18.3bnUSD 18.3bn-1.4%
    Discount factor0.97090.91530.86290.81350.76690.72300.68160.64260.60580.5711-
    Present valueUSD 20.1bnUSD 18.0bnUSD 16.7bnUSD 15.5bnUSD 14.4bnUSD 13.4bnUSD 12.6bnUSD 11.8bnUSD 11.1bnUSD 10.4bn-
    Present Value Of The ForecastUSD 143.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.661Reported 0.494, pulled toward 1.0 (Blume)
    Cost of equity7.69%Risk-free + beta x equity risk premium
    Cost of debt5.78%Risk-free + 89bp, the spread for a A- rating at 3.7x interest cover. Book interest / average debt was lower, at 4.6%.
    Market capitalisationUSD 144.4bn48.2% of capital
    Total debtUSD 155.0bn51.8% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.07%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 40.19

    66% of EV

    Forecast FCFF, final year
    USD 18.3bn
    Capex at depreciation, working capital in reinvestment
    USD 24.9bn
    Less reinvestment at g/ROIC (31.1% of NOPAT)
    USD -7.7bn
    Capitalised
    USD 17.2bn
    ROIC (reported)
    8.1%
    Terminal value, undiscounted
    USD 492.9bn
    Terminal value, discounted
    USD 281.5bn
    Enterprise value
    USD 425.3bn
    Less net debt
    USD 136.8bn
    Equity value
    USD 288.5bn

    Exit at 6.1x EBITDA

    Value per shareUSD 26.21

    56% of EV

    Terminal value, undiscounted
    USD 317.2bn
    Terminal value, discounted
    USD 181.1bn
    Enterprise value
    USD 325.0bn
    Less net debt
    USD 136.8bn
    Equity value
    USD 188.2bn

    Spread between methods: 42%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.07%80.5591.36109.42144.89243.21
    5.07%53.4456.6861.4068.7081.00
    6.07%38.1638.9840.1941.9744.67
    7.07%28.3428.2228.2028.3028.57
    8.07%21.5221.0120.5120.0119.50

    Outlined: this model. Green text: above today's price of 21.44. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year1.3%1.5%-2.6%
    EBIT margin20.1%19.7%12.9%
    Discount rate-6.1%7.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.