After AT&T (T) confirmed it has reached a deal to acquire Time Warner (TWX), Oppenheimer analyst Timothy Horan says the merger allows the former to combine leadership in distribution with a portfolio of high-quality content. The analyst thinks the deal can be about 4% accretive to EPS and free cash flow per share in 2018 with $1.5B pretax synergies. While the Department of Justice has never turned down a vertical merger, Horan expects significant political noise around the merger. Further, he sees the transaction as positive for towers, datacenters, fiber and CDNs. The analyst reiterates an Outperform rating and $46 price target on AT&T's shares.

Scotiabank raised the firm's price target on AT&T to $22.50 from $22 and keeps an Outperform rating on the shares. The companies continued execution of simplifying and streamlining operations continues to bear fruit, the analyst tells investors. While the wireless market remains competitive, reduced handset subsidies and positive pricing actions are leading to improved overall profitability metrics, the firm adds.

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FY25 EPS consensus $2.16.

Reports Q1 revenue $30B, consensus $28.65B. Reports Q1 349,000 postpaid phone net adds. "Our results this quarter reflect continued strong growth in our Mobility and Consumer Wireline connectivity businesses, which represent about 80% of our total revenues," said John Stankey, AT&T CEO. "Customers are choosing AT&T and staying with us. We achieved a record-low first-quarter postpaid phone churn, grew consumer broadband subscribers for the third consecutive quarter, and expanded margins in Mobility and Consumer Wireline. We're also delivering on our commitment to grow and improve the quality and cadence of free cash flow, which increased by more than $2 billion year over year. This consistent, solid performance driven by our investment-led strategy gives us confidence to re-affirm our full-year consolidated financial guidance."