AT&T Inc.

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10 June 2008 | 118 views
Valuation Assumptions What are these?
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Discount
Rate (%)		 Terminal
Growth (%)		 Tax (%)
Dollar39Point25
Arrow_up_green47.72% from latest share price

Revenue ($ million)

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2007 2008 2009 2010
 
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Profitability (EBITDA) Margin (%)

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Comments (1)

AT&T: Looks like a buy at $30

This valuation is supplemented by a Valuecruncher Blog post:

http://blog.valuecruncher.com/2008/08/att-looks-like-a-buy-at-30/

Assumptions:
Revenue
AT&T's revenues are forecast to grow to $125 billion in 2010 representing an annualised growth rate of 3.8% driven by AT&T's wireless and data offerings.

Profitability
EBITDA margins are forecast to remain constant at 36% over the next three years.

Discount Rate (WACC)
We have applied a discount rate of 9.00% based on Aswath Damodaran's industry analysis:

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.htm

Terminal Growth Rate
We have used a terminal growth rate of 3%. AT&T's strong wireless growth is offset by declining voice revenues.

By TheCrunchBlog, 3 months ago