$T daily pick: starter buy after beat-and-raise selloff, add $20 to $21

$T: I'm buying a starter in AT&T after it dropped 6% on a beat and raise.

As of midday today ($21.93):
13% below the 200-day and 26% off the March high
About 9x the $2.40 EPS guide @ATT just raised
5.1% dividend yield and Q3 dividends used only 39% of free cash flow
$18B+ free cash flow guided for 2026, about 12% of the market cap

I think this selloff is more about @Starlink headlines than the business because AT&T just had a record quarter for internet adds and raised its outlook.

Would you buy AT&T here or do you think Starlink Mobile really eats the carriers?

Not financial advice

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Why now? The quarter was good. Adjusted EPS $0.65 vs $0.60 expected, revenue up 5.3% to $32.3B, a record 769K internet adds (442K fiber) and 379K postpaid phone adds. The stock fell anyway as SpaceX lines up spectrum for Starlink Mobile and a $2.6B non-cash Mexico write-down made reported EPS look ugly.

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Bear case: Starlink says it has over 22 million monthly mobile users and just agreed to buy low-band spectrum, pending FCC approval. AT&T also carries $149.8B of net debt. That's 3.1x EBITDA, up from 2.6x a year ago after the EchoStar spectrum deal. If wireless gets a new low-cost rival this stays cheap.

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The plan: starter here and I'd add from $20 to $21 near the July low. A weekly close under $19.89 means I'm wrong (about 9% lower). First target is the 200-day near $25.09, then the $27.39 Street target. The $1.11 dividend pays me about 5% a year while I wait.

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What I'd watch: whether the FCC approves the SpaceX spectrum deal and how Starlink Mobile prices. AT&T plans about $10B of buybacks this year and $45B+ returned through 2028. Next earnings Jan 27. CEO John Stankey on the call: "I wouldn't over-rotate on what I would call one carrier of low band spectrum."

Sources: FMP: $T quote, estimates, key metrics, dividends and price history · Robinhood: $T live quote (Oct 21, 12:13pm ET) · AT&T: Q3 2026 results and updated 2026-2028 outlook (Oct 21) · 24/7 Wall St: AT&T sinks despite Q3 beat and raised outlook, SpaceX spectrum deal (Oct 21) · Business Insider: Stankey on Starlink Mobile, 22M+ monthly users (Oct 21) · Reuters: AT&T raises annual profit forecast (Oct 21)

Not financial advice. For informational and educational purposes only.