AT&T (T) stock rallied more than 4% on Tuesday following the company’s investor day event. The event was highlighted by the company’s CEO outlined AT&T’s plan to “drive sustainable growth and enhanced shareholder returns”.
Included in the details of the plan are AT&T’s announcement to focus on building the nation’s largest fiber broadband network. The company sees its network as serving more than 50 million customers.
When asked about the company’s investment in its broadband network while Companies like Starlink were expanding their satellite connectivity networks the company’s CEO pointed out the need for fiber connectivity for growing AI demand and connectivity.
Satellite networks provide slower connections that suffer from latency issues.
AT&T also announced its plan to return $40 billion to shareholders through dividend payments and share repurchases over the next three years.
The company will initiate those efforts with an authorized $10 billion share buyback program that runs through 2026.
Further displaying the company’s financial strength, AT&T is forecasting more than $18 billion in free cash flow by 2027. The announcement strengthens the stock as an income provider with its 4.73% dividend yield.
AT&T shares have been trading in what is best described as a low-volatility bull market rally.
Shares have trended smoothly from $17 in July to their current price of $23.50. That 38% move has only seen one day in which the stock dropped more than 2%. To put that into perspective, the S&P 500 has seen three drops of 2% or more over the same period.
Today’s move comes close to triggering a “Volatility Rally” as AT&T stock is attempting to break above its top Bollinger Band.
A break above that band will indicate that the stock is preparing to make another aggressive move higher. The last similar signal was in early September ahead of an eleven-day 12% rally.
Shares of AT&T maintain a bullish outlook with a price target of $30.
