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Agnico Eagle Mines and Hormel Foods have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 3, 2025 – Zacks Equity Research shares Agnico Eagle Mines (AEM - Free Report) as the Bull of the Day and Hormel Foods Corp. (HRL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AT&T, Inc. (T - Free Report) , Verizon Communications Inc. (VZ - Free Report) and T-Mobile US, Inc. (TMUS - Free Report) .
The shiny metal is outperforming most individual stocks, the broader U.S. indexes, and even Bitcoin. The price movement is a sign of strength as we head deeper into the second half of the year. Two major themes are responsible for gold’s ascent.
First, the value of the U.S. dollar against other currencies dropped by about 11% in the first half of this year, the largest decline in more than 50 years. Gold and the dollar normally move in opposite directions; this inverse relationship is vital to understand.
The U.S. dollar went off the gold standard in 1971, and despite some short-term periods of strength, the dollar has been in a long-term downtrend ever since. The U.S. is the world’s largest debtor nation. As U.S. debt and deficits continue to balloon, they exert downward pressure on the dollar.
Historically viewed as a hedge against inflation and currency devaluation, precious metals can be a great portfolio diversifier. Seen as a safe haven in times of uncertainty, gold’s recent rise comes as we near the next phase of the easing cycle with the Fed set to cut interest rates later this month.
How to Find Leading Gold Stocks
The best investors are able to adapt their strategies to the current market environment. Similar to an offensive play-caller, these investors successfully adjust to what the other side (the market) is doing by targeting the right industries and executing the proper strategies.
When most stocks are swingy and volatile, employing a strategy that takes advantage of the market dynamic can not only help us navigate uncertain times – but thrive and outperform. Here at Zacks, we make the process easier for investors by ranking stocks and industry groups, helping narrow down the investment universe to stocks with the best profit potential.
There are numerous ways to gain exposure to precious metals. While investing directly in metals can be lucrative, decades of market history have shown us that it is far more profitable to own stocks of companies that produce commodities than the commodities they produce.
One of the best ways to target these metals from an investment perspective is to own the stocks of mining companies. These stocks typically outperform the underlying precious metals due to growth in their intrinsic value.
Precious metals do not have the potential for intrinsic value growth as stocks do. The ability of companies to increase their intrinsic value has always enabled stocks to outperform other types of investments. As the intrinsic value of a company grows, the company can increase its production or services which in turn creates more income.
The Zacks Mining – Gold industry group currently ranks in the top 36% of all Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
Stocks in this industry group remain relatively undervalued and are projected to experience above-average earnings growth, signifying a powerful combination that should lead to higher prices in the future. By targeting stocks in the top industry groups, we can dramatically improve our investing success.
Gold Miner Soars to All-Time High
Miners stand to benefit from higher prices and have transitioned into market leaders. Higher gold prices are expected to drive company margins.
Agnico Eagle Mines is a Zacks Rank #1 (Strong Buy) stock that has been handily outperforming the market this year. The company engages in the exploration and production of precious metals including gold, silver, zinc, and copper. Its mines are located in Canada, Australia, Finland, and Mexico. Agnico Eagle also conducts exploration and development activities in Latin America and the United States.
The metals miner is focused on executing projects that are expected to provide additional production growth. The company’s Kittila expansion promises cost savings. Acquisitions such as Hope Bay and the merger with Kirkland Lake Gold strengthen its market position, establishing Agnico Eagle as the industry's highest-quality senior gold producer. The integrated entity now has an extensive pipeline of development and exploration projects to drive sustainable growth.
We can see below that AEM stock (shown in green) has been steadily rising in 2025, even during the nasty correction that occurred earlier in the year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock. Shares have risen more than 90% year-to-date, outpacing the SPDR Gold ETF shown in gold, Bitcoin (in red), and the S&P 500 (in black).
The gold producer has surpassed earnings estimates in 14 consecutive quarters. The company delivered a trailing four-quarter average earnings surprise of over 10%. Consistently beating earnings estimates is a recipe for success.
Analysts have revised earnings estimates for Agnico Eagle Mines upward lately. For the current year, estimates have been increased 8.1% in the past 60 days. The 2025 Zacks Consensus EPS Estimate now stands at $6.94 per share, reflecting a 64% growth rate relative to the prior year.
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) indicator seeks to find companies that have recently seen positive earnings estimate revision activity. This more recent information has proven to be very useful in finding positive earnings surprises, giving investors a leg up during earnings season. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
AEM is currently a Zacks Rank #1 (Strong Buy) stock and boasts a +4.87% Earnings ESP. Another beat may be in the cards when the company reports its Q3 results in late October.
Bottom Line
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why AEM stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. Keep an eye on this leading gold producer as the mining group continues to outperform the market.
Disclosure: AEM is a current holding in the Zacks Income Investor portfolio.
Hormel Foods Corp. develops, processes, and distributes meat, nuts, and other food products to foodservice customers, convenience stores, and other commercial customers in the United States and internationally. The company provides various perishable products including fresh meats, refrigerated meals, and frozen items, as well as shelf-stable products like nut butters, tortilla chips, and nutritional food supplements.
Founded in 1891 and headquartered in Austin, Minnesota, Hormel Foods sells its products under a variety of recognized brand names such as Applegate, Mr. Peanut, Planters, Skippy, and Spam.
Hormel Foods continues to face mounting profitability challenges despite solid sales momentum in its latest fiscal quarter. Margins remain under strain as elevated input costs and inflationary headwinds weigh heavily on earnings, with pricing actions and cost-saving efforts proving insufficient.
At the same time, profitability across all key segments weakened further in the prior quarter, as commodity-driven pressures and higher selling, general and administrative expenses more than offset sales growth. The company also operates in a highly competitive food industry marked by price sensitivity and heavy promotions.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, Hormel Foods is a component of the Zacks Food – Meat Products industry group, which currently ranks in the bottom 27% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the past few months:
Image Source: Zacks Investment Research
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
HRL shares have been underperforming the market over the past year. The stock is hitting 52-week lows and represents a compelling short opportunity as we head further into the second half of 2025.
Recent Earnings Misses & Deteriorating Outlook
Hormel Foods has fallen short of earnings estimates in three of the past four quarters. Just last week, the company reported fiscal third-quarter earnings of 35 cents per share, missing the Zacks Consensus Estimate by -14.6%.
Hormel has posted a trailing four-quarter average earnings miss of -5.6%. Consistently falling short of earnings estimates is a recipe for underperformance, and HRL is no exception.
The Spam maker has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -12.77% in the past 60 days. The fiscal Q4 Zacks Consensus EPS Estimate is now $0.41 per share, reflecting negative growth of -2.4% relative to the year-ago period.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, HRL stock is in a sustained downtrend. Notice how the stock recently hit a 52-week low, widely underperforming the major indices. Also note that shares are trading below a downward-sloping 200-day (red line) moving average – another good sign for the bears.
HRL stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average (blue line) crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 17% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that HRL stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of HRL until the situation shows major signs of improvement.
Additional content:
AT&T Shares Rise 28.6% YTD; Is the Stock Still a Buy?
AT&T, Inc.has gained 28.6% over the past year compared with the Wireless National industry’s growth of 15.9%. The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.
The company has outperformed its peers like Verizon Communications Inc. and T-Mobile US, Inc. Verizon has gained 10.5%, while TMUS has increased 16.8% during this period.
T Rides on Strategic Divestiture, Fiber Expansion
AT&T is aggressively expanding its fiber network infrastructure nationwide. Recently, Gigapower, a joint venture of AT&T and Global Infrastructure Partners, has expanded its fiber footprint across six states in the United States. The joint venture is aiming to reach 1.5 million fiber locations nationwide. Growing demand for high-speed connectivity to support high-bandwidth intensive applications is driving demand for robust broadband infrastructure.
The federal government is also pushing for network infrastructure expansion to reduce the digital divide through various policies. To capitalize on these emerging market trends, AT&T has taken a multi-dimensional approach, which includes expanding and enhancing its in-region fiber network, public-private partnerships, commercial open access agreements and strategic buyouts. In its joint venture with Global Infrastructure Partners, AT&T gains from fiber expansion without having to bear the complete capex requirements.
The company’s fiber broadband network has reached 30 million consumer and business locations across the country during the second quarter. It is also acquiring Lumen’s fiber business, which will boost its fiber footprint across 11 U.S. states. By the end of 2030, AT&T expects to reach approximately 50 million customer locations with its in-region fiber network and more than 60 million fiber locations when including the Lumen Mass Markets fiber assets.
Despite a mature and saturated mobile market, the growing proliferation of AI and IoT will continue to drive demand for consistent 5G connectivity. AT&T has been focusing on expanding its 5G portfolio offerings to boost its competitive edge in the 5G market. It is set to acquire wireless spectrum licenses from EchoStar.
The deal, valued at $23 billion, is set to add approximately 20 MHz of nationwide 600 MHz low-band spectrum and about 30 MHz of nationwide 3.45 GHz mid-band spectrum to AT&T’s spectrum portfolio. AT&T’s recent initiatives are perfectly aligned with its converged connectivity push. The acquisition will strengthen its 5G offerings, and when combined with AT&T’s fiber footprint, it will allow the company to effectively support advanced AI and IoT applications.
Major Challenges for T
AT&T continues to face stiff competition from Verizonand T-Mobile US. Despite the recent acquisition of EchoStar, it is still playing a catch-up game with VZ and TMUS in 5G mid-band deployment. Growing investment in 5G and fiber infrastructure is also placing a strain on the company’s liquidity.
As of June 30, 2025, AT&T had $10.5 billion of cash and cash equivalents with long-term debt of $123.06 billion compared with respective tallies of $6.88 billion and $117.26 billion in the previous quarter. This indicates that although its short-term liquidity has improved, its long-term debt burden has increased significantly. At the end of the second quarter, the company had a current ratio of 0.81 and a cash ratio of 0.22. It indicates the company may face challenges in meeting short-term debt obligations.
Estimate Revision Trend of T
Earnings estimates for AT&T for 2025 and 2026 have increased over the past 60 days.
Key Valuation Metric of T
From a valuation standpoint, AT&T appears to be trading relatively cheaper compared to the industry but trading above its mean. Going by the price/earnings ratio, the company shares currently trade at 13.38 forward earnings, lower than 13.69 for the industry but above the stock’s mean of 12.31.
End Note
AT&T is benefiting from healthy momentum in postpaid wireless business with a lower churn rate. While optimizing operations, AT&T is aiming to increase efficiencies to lower operating costs while focusing on 5G and fiber-based connectivity, along with an expanded reach of software-based entertainment platforms.
However, its high debt obligations remain a major obstacle in this initiative. Intensifying competition from other industry leaders is weighing on margin. With a Zacks Rank #3 (Hold), AT&T appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Agnico Eagle Mines and Hormel Foods have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 3, 2025 – Zacks Equity Research shares Agnico Eagle Mines (AEM - Free Report) as the Bull of the Day and Hormel Foods Corp. (HRL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AT&T, Inc. (T - Free Report) , Verizon Communications Inc. (VZ - Free Report) and T-Mobile US, Inc. (TMUS - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
It’s no secret that gold is doing well this year.
The shiny metal is outperforming most individual stocks, the broader U.S. indexes, and even Bitcoin. The price movement is a sign of strength as we head deeper into the second half of the year. Two major themes are responsible for gold’s ascent.
First, the value of the U.S. dollar against other currencies dropped by about 11% in the first half of this year, the largest decline in more than 50 years. Gold and the dollar normally move in opposite directions; this inverse relationship is vital to understand.
The U.S. dollar went off the gold standard in 1971, and despite some short-term periods of strength, the dollar has been in a long-term downtrend ever since. The U.S. is the world’s largest debtor nation. As U.S. debt and deficits continue to balloon, they exert downward pressure on the dollar.
Historically viewed as a hedge against inflation and currency devaluation, precious metals can be a great portfolio diversifier. Seen as a safe haven in times of uncertainty, gold’s recent rise comes as we near the next phase of the easing cycle with the Fed set to cut interest rates later this month.
How to Find Leading Gold Stocks
The best investors are able to adapt their strategies to the current market environment. Similar to an offensive play-caller, these investors successfully adjust to what the other side (the market) is doing by targeting the right industries and executing the proper strategies.
When most stocks are swingy and volatile, employing a strategy that takes advantage of the market dynamic can not only help us navigate uncertain times – but thrive and outperform. Here at Zacks, we make the process easier for investors by ranking stocks and industry groups, helping narrow down the investment universe to stocks with the best profit potential.
There are numerous ways to gain exposure to precious metals. While investing directly in metals can be lucrative, decades of market history have shown us that it is far more profitable to own stocks of companies that produce commodities than the commodities they produce.
One of the best ways to target these metals from an investment perspective is to own the stocks of mining companies. These stocks typically outperform the underlying precious metals due to growth in their intrinsic value.
Precious metals do not have the potential for intrinsic value growth as stocks do. The ability of companies to increase their intrinsic value has always enabled stocks to outperform other types of investments. As the intrinsic value of a company grows, the company can increase its production or services which in turn creates more income.
The Zacks Mining – Gold industry group currently ranks in the top 36% of all Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
Stocks in this industry group remain relatively undervalued and are projected to experience above-average earnings growth, signifying a powerful combination that should lead to higher prices in the future. By targeting stocks in the top industry groups, we can dramatically improve our investing success.
Gold Miner Soars to All-Time High
Miners stand to benefit from higher prices and have transitioned into market leaders. Higher gold prices are expected to drive company margins.
Agnico Eagle Mines is a Zacks Rank #1 (Strong Buy) stock that has been handily outperforming the market this year. The company engages in the exploration and production of precious metals including gold, silver, zinc, and copper. Its mines are located in Canada, Australia, Finland, and Mexico. Agnico Eagle also conducts exploration and development activities in Latin America and the United States.
The metals miner is focused on executing projects that are expected to provide additional production growth. The company’s Kittila expansion promises cost savings. Acquisitions such as Hope Bay and the merger with Kirkland Lake Gold strengthen its market position, establishing Agnico Eagle as the industry's highest-quality senior gold producer. The integrated entity now has an extensive pipeline of development and exploration projects to drive sustainable growth.
We can see below that AEM stock (shown in green) has been steadily rising in 2025, even during the nasty correction that occurred earlier in the year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock. Shares have risen more than 90% year-to-date, outpacing the SPDR Gold ETF shown in gold, Bitcoin (in red), and the S&P 500 (in black).
The gold producer has surpassed earnings estimates in 14 consecutive quarters. The company delivered a trailing four-quarter average earnings surprise of over 10%. Consistently beating earnings estimates is a recipe for success.
Analysts have revised earnings estimates for Agnico Eagle Mines upward lately. For the current year, estimates have been increased 8.1% in the past 60 days. The 2025 Zacks Consensus EPS Estimate now stands at $6.94 per share, reflecting a 64% growth rate relative to the prior year.
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) indicator seeks to find companies that have recently seen positive earnings estimate revision activity. This more recent information has proven to be very useful in finding positive earnings surprises, giving investors a leg up during earnings season. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
AEM is currently a Zacks Rank #1 (Strong Buy) stock and boasts a +4.87% Earnings ESP. Another beat may be in the cards when the company reports its Q3 results in late October.
Bottom Line
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why AEM stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. Keep an eye on this leading gold producer as the mining group continues to outperform the market.
Disclosure: AEM is a current holding in the Zacks Income Investor portfolio.
Bear of the Day:
Hormel Foods Corp. develops, processes, and distributes meat, nuts, and other food products to foodservice customers, convenience stores, and other commercial customers in the United States and internationally. The company provides various perishable products including fresh meats, refrigerated meals, and frozen items, as well as shelf-stable products like nut butters, tortilla chips, and nutritional food supplements.
Founded in 1891 and headquartered in Austin, Minnesota, Hormel Foods sells its products under a variety of recognized brand names such as Applegate, Mr. Peanut, Planters, Skippy, and Spam.
Hormel Foods continues to face mounting profitability challenges despite solid sales momentum in its latest fiscal quarter. Margins remain under strain as elevated input costs and inflationary headwinds weigh heavily on earnings, with pricing actions and cost-saving efforts proving insufficient.
At the same time, profitability across all key segments weakened further in the prior quarter, as commodity-driven pressures and higher selling, general and administrative expenses more than offset sales growth. The company also operates in a highly competitive food industry marked by price sensitivity and heavy promotions.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, Hormel Foods is a component of the Zacks Food – Meat Products industry group, which currently ranks in the bottom 27% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the past few months:
Image Source: Zacks Investment Research
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
HRL shares have been underperforming the market over the past year. The stock is hitting 52-week lows and represents a compelling short opportunity as we head further into the second half of 2025.
Recent Earnings Misses & Deteriorating Outlook
Hormel Foods has fallen short of earnings estimates in three of the past four quarters. Just last week, the company reported fiscal third-quarter earnings of 35 cents per share, missing the Zacks Consensus Estimate by -14.6%.
Hormel has posted a trailing four-quarter average earnings miss of -5.6%. Consistently falling short of earnings estimates is a recipe for underperformance, and HRL is no exception.
The Spam maker has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -12.77% in the past 60 days. The fiscal Q4 Zacks Consensus EPS Estimate is now $0.41 per share, reflecting negative growth of -2.4% relative to the year-ago period.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, HRL stock is in a sustained downtrend. Notice how the stock recently hit a 52-week low, widely underperforming the major indices. Also note that shares are trading below a downward-sloping 200-day (red line) moving average – another good sign for the bears.
HRL stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average (blue line) crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 17% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that HRL stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of HRL until the situation shows major signs of improvement.
Additional content:
AT&T Shares Rise 28.6% YTD; Is the Stock Still a Buy?
AT&T, Inc.has gained 28.6% over the past year compared with the Wireless National industry’s growth of 15.9%. The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.
The company has outperformed its peers like Verizon Communications Inc. and T-Mobile US, Inc. Verizon has gained 10.5%, while TMUS has increased 16.8% during this period.
T Rides on Strategic Divestiture, Fiber Expansion
AT&T is aggressively expanding its fiber network infrastructure nationwide. Recently, Gigapower, a joint venture of AT&T and Global Infrastructure Partners, has expanded its fiber footprint across six states in the United States. The joint venture is aiming to reach 1.5 million fiber locations nationwide. Growing demand for high-speed connectivity to support high-bandwidth intensive applications is driving demand for robust broadband infrastructure.
The federal government is also pushing for network infrastructure expansion to reduce the digital divide through various policies. To capitalize on these emerging market trends, AT&T has taken a multi-dimensional approach, which includes expanding and enhancing its in-region fiber network, public-private partnerships, commercial open access agreements and strategic buyouts. In its joint venture with Global Infrastructure Partners, AT&T gains from fiber expansion without having to bear the complete capex requirements.
The company’s fiber broadband network has reached 30 million consumer and business locations across the country during the second quarter. It is also acquiring Lumen’s fiber business, which will boost its fiber footprint across 11 U.S. states. By the end of 2030, AT&T expects to reach approximately 50 million customer locations with its in-region fiber network and more than 60 million fiber locations when including the Lumen Mass Markets fiber assets.
Despite a mature and saturated mobile market, the growing proliferation of AI and IoT will continue to drive demand for consistent 5G connectivity. AT&T has been focusing on expanding its 5G portfolio offerings to boost its competitive edge in the 5G market. It is set to acquire wireless spectrum licenses from EchoStar.
The deal, valued at $23 billion, is set to add approximately 20 MHz of nationwide 600 MHz low-band spectrum and about 30 MHz of nationwide 3.45 GHz mid-band spectrum to AT&T’s spectrum portfolio. AT&T’s recent initiatives are perfectly aligned with its converged connectivity push. The acquisition will strengthen its 5G offerings, and when combined with AT&T’s fiber footprint, it will allow the company to effectively support advanced AI and IoT applications.
Major Challenges for T
AT&T continues to face stiff competition from Verizonand T-Mobile US. Despite the recent acquisition of EchoStar, it is still playing a catch-up game with VZ and TMUS in 5G mid-band deployment. Growing investment in 5G and fiber infrastructure is also placing a strain on the company’s liquidity.
As of June 30, 2025, AT&T had $10.5 billion of cash and cash equivalents with long-term debt of $123.06 billion compared with respective tallies of $6.88 billion and $117.26 billion in the previous quarter. This indicates that although its short-term liquidity has improved, its long-term debt burden has increased significantly. At the end of the second quarter, the company had a current ratio of 0.81 and a cash ratio of 0.22. It indicates the company may face challenges in meeting short-term debt obligations.
Estimate Revision Trend of T
Earnings estimates for AT&T for 2025 and 2026 have increased over the past 60 days.
Key Valuation Metric of T
From a valuation standpoint, AT&T appears to be trading relatively cheaper compared to the industry but trading above its mean. Going by the price/earnings ratio, the company shares currently trade at 13.38 forward earnings, lower than 13.69 for the industry but above the stock’s mean of 12.31.
End Note
AT&T is benefiting from healthy momentum in postpaid wireless business with a lower churn rate. While optimizing operations, AT&T is aiming to increase efficiencies to lower operating costs while focusing on 5G and fiber-based connectivity, along with an expanded reach of software-based entertainment platforms.
However, its high debt obligations remain a major obstacle in this initiative. Intensifying competition from other industry leaders is weighing on margin. With a Zacks Rank #3 (Hold), AT&T appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.