AT&T: Much Better Than Verizon (NYSE:T)


Indianapolis - March 2016: AT&T Indiana Headquarters VI

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Thesis

In assessing the investment potential of AT&T, Inc. (NYSE:T), a comprehensive analysis using three distinct Discounted Cash Flow [DCF] scenarios reveals a compelling narrative. These scenarios, spanning from optimistic growth to more conservative projections, highlight the considerable upside potential of AT&T’s stock. With

TABLE OF ASSUMPTIONS
(Current data)
Assumptions Part 1
Equity Value 101,903.00
Debt Value 168,693.00
Cost of Debt 3.73%
Tax Rate 40.00%
10y Treasury 4.80%
Beta 0.67
Market Return 10.50%
Cost of Equity 8.62%
Assumptions Part 2
EBIT
Tax 3,548.00
D&A 14,193.50
CapEx 18,755.00
Capex Margin 13.50%
Assumption Part 3
Net Income -8,774.00
Interest 6,296.00
Tax 3,548.00
D&A 15,284.00
EBITDA 16,354.00
D&A Margin 12.59%
Interest Expense Margin 5.18%
Revenue 121,442.0

Revenue Operating Income Plus D&A Plus Interest
2023 $121,790.0 $24,224.03 $39,551.83 $45,865.87
2024 $123,360.0 $24,536.30 $39,864.10 $46,178.14
2025 $125,395.4 $24,941.15 $40,722.71 $47,223.67
2026 $127,464.5 $25,352.68 $41,394.64 $48,002.86
2027 $129,567.6 $25,771.00 $42,077.65 $48,794.91
2028 $131,705.5 $26,196.22 $42,771.93 $49,600.03
^Final EBITA^

D&A Projection Interest Projection
2023 15,327.797 6,314.04
2024 15,327.797 6,314.04
2025 15,781.557 6,500.96
2026 16,041.953 6,608.23
2027 16,306.645 6,717.26
2028 16,575.705 6,828.10

Revenue Operating Income Plus D&A Plus Interest
2023 $121,790.0 $24,224.03 $39,551.83 $45,865.87
2024 $123,360.0 $24,536.30 $39,864.10 $46,178.14
2025 $124,026.1 $24,668.80 $40,278.03 $46,708.00
2026 $124,695.9 $24,802.01 $40,495.53 $46,960.22
2027 $125,369.2 $24,935.94 $40,714.20 $47,213.81
2028 $126,046.2 $25,070.60 $40,934.06 $47,468.76
^Final EBITA^

D&A Projection Interest Projection
2023 15,327.797 6,314.04
2024 15,327.797 6,314.04
2025 15,609.226 6,429.97
2026 15,693.515 6,464.69
2027 15,778.260 6,499.60
2028 15,863.463 6,534.70

Revenue Operating Income Plus D&A Plus Interest
2023 $121,790.0 $24,224.03 $39,551.83 $45,865.87
2024 $123,360.0 $24,536.30 $39,864.10 $46,178.14
2025 $111,098.0 $22,097.40 $36,079.56 $41,839.29
2026 $100,054.9 $19,900.91 $32,493.25 $37,680.46
2027 $90,109.4 $17,922.76 $29,263.42 $33,935.03
2028 $81,152.5 $16,141.24 $26,354.64 $30,561.88

^Final EBITA^

D&A Projection Interest Projection
2023 15,327.797 6,314.04
2024 15,327.797 6,314.04
2025 13,982.165 5,759.73
2026 12,592.338 5,187.21
2027 11,340.659 4,671.60
2028 10,213.398 4,207.25



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