Summary
- AT&T shakes up WarnerMedia only days after finally ending the appeal of the DOJ lawsuit.
- Closing the merger and the lawsuit isn't a sure path to a higher stock price.
- A sole focus on improving operations and paying down debt will lead to multiple expansion.
- A similar P/E multiple to Verizon pushes the stock toward $42.50.
The constant comment over the last few months was that AT&T (T) was being held down by the Justice Department lawsuit appeal of the Time Warner merger. The reality will start setting in with shareholders that the debt load and integration fears are a bigger problem as the telecom and media giant explicitly reshuffles the management team at the previously successful WarnerMedia. If AT&T now focuses on the basics of making these existing business units better, the stock will finally rise.
Image Source: WarnerMedia website
