AT&T Inc.’s focus on unlimited data plans appears to have hurt first-quarter results more than previously expected, said analyst Jeffrey Kvaal at Instinet, who responded by trimming his stock price target and his 2017 earnings forecasts. Kvaal said the elimination of overage fees, combined with more promotional activity, has lowered the average-revenue-per-user (ARPU) trajectory for the company, as well as its rivals. He cut his stock price target to $45 from $46 and his 2017 adjusted EPS estimate to $2.92 from $2.98. The FactSet EPS consensus is $2.94. “We believe AT&T is aggressively pushing unlimited. With the elimination of overage fees and plan optimization, service revenue will most likely not return to growth until 4Q at the earliest,” Kvaal wrote in a research note. He kept AT&T’s rating at buy, however, saying he preferred the company to its peers given its “relatively lesser exposure to wireless.” AT&T’s stock edged up 0.1% in morning trade, while shares of Verizon Communications Inc. slipped 0.1% and of T-Mobile US Inc. and of Spring Corp. were little changed. The S&P 500 eased 0.1%.
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