Investing.com -- AT&T was upgraded to Outperform from Peer Perform by Wolfe Research, which said the telecom giant's improving operating fundamentals and attractive valuation more than offset lingering concerns over competition from SpaceX's Starlink mobile ambitions. The brokerage assigned a $29 price target, implying nearly 26% upside from the stock's recent close.

The upgrade follows AT&T's stronger-than-expected second-quarter results, which featured stabilizing subscriber trends, resilient pricing, accelerating share buybacks and reaffirmed 2028 financial guidance. Wolfe said investor concerns over worsening churn and pricing pressure have eased, while the Starlink threat is unlikely to materially disrupt the wireless market before at least 2027.

Wolfe argued AT&T's current valuation of about 9.5 times earnings and a 4.8% dividend yield fails to reflect its long-term earnings outlook. The firm forecasts adjusted earnings per share of about $2.90 by 2028, supported by an estimated 11% EPS compound annual growth rate and potential annual total returns of roughly 16%.

The brokerage highlighted improving customer metrics, noting postpaid phone churn declined to 0.86% in the second quarter despite a price increase, while lower device upgrade rates alongside solid subscriber additions suggest AT&T's strategy of bundling wireless and fiber services is strengthening customer loyalty.

Wolfe also raised several 2026 forecasts, including postpaid phone net additions, wireless service revenue, adjusted EBITDA and earnings per share. It now expects AT&T to generate adjusted EBITDA of $48.2 billion, EPS of $2.34 and accelerate share repurchases to $10 billion this year.

While maintaining that Starlink remains a long-term competitive risk, Wolfe said meaningful disruption would require years of spectrum acquisition and regulatory approvals, leaving AT&T's improving execution and cash flow outlook as the more immediate drivers of shareholder returns.