Jim Cramer Stocks: 10 Latest Calls

1. AT&T Inc (NYSE:T)

Number of Hedge Fund Investors: 71

A questioner asked Jim Cramer on CNBC whether he should let AT&T go or hold it.

“Let it go. There are a lot of better opportunities including by the way T-Mobile which is really a horse,” Cramer said.

However, some analysts believe AT&T Inc (NYSE:T) has learned from the mistakes of the past and now focuses on a few areas instead of trying to expand as a conglomerate. With DirecTV and TimeWarner now out of the way via spinoffs, AT&T’s key goal is to expand its 5G business. During the recently reported quarter, AT&T Inc (NYSE:T) saw a 2% increase in postpaid phone subscribers and a similar 2% rise in average revenue per user (ARPU), matching inflation rates. This demonstrates its ability to attract new subscribers in a saturated market, leading to growth in both revenue and EBITDA margins.

Analysts believe AT&T Inc (NYSE:T) is on track to reduce its debt to a net debt-to-adjusted EBITDA ratio of 2.5x by the first half of 2025, which should secure its nearly 6% dividend and boost shareholder returns.

On the financial front, AT&T reduced its net debt by $5.1 billion while growing EBITDA, with a low average interest rate of 4.2%, resulting in manageable annual interest payments of around $5.5 billion. Analysts believe AT&T Inc (NYSE:T) 2024 outlook remains strong, with 3% adjusted EBITDA growth, robust revenue, and significant capital investment for future growth.

With a solid single-digit P/E ratio and $17.5 billion in free cash flow, analysts believe AT&T Inc (NYSE:T) is well-positioned to cover its dividend and pursue share buybacks, making it an attractive option for patient investors.

While we acknowledge the potential of AT&T Inc (NYSE:T), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than T but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

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