Wells Fargo: AT&T Faces Starlink Competition, Downgraded to Underweight
Miles Bennett
Wells Fargo initiated coverage of AT&T with an underweight rating and an $18 price target, implying roughly 15% downside; the core thesis is that Starlink is squeezing AT&T on both broadband and wireless fronts simultaneously.
Why did Wells Fargo open with an "underweight"?
Analyst Steven Cahall initiated AT&T coverage at underweight with an $18 target — about 15% below Tuesday's close.
His core call is blunt: Starlink is the near-term broadband winner, with an edge over fixed wireless access (FWA — broadband delivered via cell towers instead of fiber) now and a disruptive threat to wireless long-term.
This means → Wells Fargo sees AT&T facing not just another competitor but a rival that could rewrite the rules of the game.
Where is AT&T most vulnerable?
Outside AT&T's fiber footprint, competition will be fierce — and AT&T's market-share base in those areas is already weak.
In plain terms = AT&T's fiber network only reaches part of the country; the places it doesn't reach are exactly where Starlink's satellite internet can most easily poach subscribers.
Cahall flags that AT&T's wireless net-add numbers face the greatest risk, because these "fiber-dark" subscribers are the easiest for Starlink to attract.
Why is AT&T worse positioned than its peers?
Cahall argues AT&T is less likely than rivals to strike an MVNO deal with Starlink — an arrangement where a carrier resells Starlink's network under its own brand.
This means → other carriers might adopt an "if you can't beat them, join them" strategy, but AT&T may not even have that option.
To generate upside, AT&T must outperform on fiber and bundled services — in other words, the only path left is a head-on fight.
What does the rest of Wall Street think?
Wells Fargo's bearish call runs against the Street consensus: of 29 analysts covering AT&T, 15 rate it buy or strong buy and 14 rate it hold — none had rated it underweight before.
AT&T shares have already fallen 15% year-to-date, weighed down by high infrastructure costs and the commoditization of telecom services.
Despite the bearish signal, AT&T's stock barely moved in pre-market trading. This reflects the market treating the call, for now, as one dissenting voice rather than a consensus shift.
Content is for reference only, not financial advice.