AT&T (NYSE:T) is expected to perform enviously well next year, and the market estimates it will be performing quite well in the following years.
Investing in the company presents an optimal risk-reward proposition with low downside and outstanding upside potential, and as for its price, it is somewhat undervalued with high dividends.
5G and HBO Max will mark the future of the company, and if it goes the way the company is planning, the stock will shine in any portfolio. While the price has dropped considerably in the last few months, its long term prospects are almost intact.
5G & HBO Max
Two catalysts will push AT&T higher 5G and HBO Max. The introduction of 5G will motivate users to change their phones and contracts to get faster and better internet. With a higher internet speed, the company will be able to increase the prices and probably the margin of the contract. While the implementation of 5G will require capital investments, the additional revenue should offset the capital expenditure. As the video below shows, capital expenditure will need to increase, and the rollout of 5G will take time, but the increase in demand for 5G will increase the revenue of the company.
The other catalyst is HBO Max, while the platform has some omissions, and the rollout has been anything but smooth. AT&T has the amount of content needed to become the leading player and perhaps the most significant player in the streaming wars. While Netflix(NFLX) and Disney(NYSE:DIS) also have an enormous amount of content and are likely to get a slice of the pie, AT&T's share could increase as it will become available worldwide faster that Disney+.
While the company might have some hurts during the transition, streaming will likely provide a higher margin than cable, which should increase the company's
