AT&T (t) and BlackRock, the world’s largest asset management company, have agreed to form a joint venture to expand fiber optic networks and broadband services beyond the scope of their current wireline operations. Telcos. AT&T stock rallied on the news.
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Called Gigapower, the joint venture will sell wholesale fiber optic services to internet service providers and other businesses. Gigapower will expand fiber network services beyond AT&T’s traditional 21-state wireline service.
“This is a much smaller initial step than we anticipated, with the target of only 1.5 million sites approved,” Raymond James analyst Frank Louthan said in a report. AT&T did not disclose a target date to complete construction for 1.5 million homes and businesses.
In addition, AT&T still plans to expand its own fiber optic network to more than 30 million homes and businesses by the end of 2025. At the end of Q9, the network had 18.5 million.
AT&T Stock: Free Cash Flow Guide 2023
AT&T is expected to report consumer subscribers served through Gigapower in the results of its consumer wireline business unit. Any impact on AT&T’s 2023 free cash flow or capital investment forecast will be included in AT&T’s 2023 financial guidance.
Additionally, AT&T stock edged up slightly to close at 18.31 on Jan stock market today.
Additionally, AT&T will report fourth-quarter 2022 results in January. Analysts have stated that AT&T’s free cash flow guidance for 2023 will be key for T stock.
“The biggest debate about AT&T right now is whether it will hit the street FCF estimate when it comes to its 2023 guidance,” Louthan added. “We believe this (the BlackRock joint venture) could give them some headroom to lower the selling price.”
In the September quarter, AT&T’s broadband subscription addition was a bright spot.
AT&T Outperforms the S&P 500
AT&T added 338,000 fiber broadband subscribers, surpassing the view count from AT&T stock analysts of 330,000.
T stock is down 1.6% in 2022 when the market closes on Thursday, outperforming the S&P 500. The S&P 500 is down 20% this year.
AT&T stock has a Relative Strength Rating of 80 out of the best 99 possible, according to Check IBD Stocks.
WarnerMedia spun off AT&T and merged with Discovery in early April. New media company called Discovery of Warner Bros. (white blood cells).
BlackRock is a leading provider of exchange-traded funds and other low-cost alternatives to tracking market indices.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.
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