Summary
AT&T has a number of positives -- AT&T is very recession-proof, for example.
There are negatives as well, though. High debt levels make the company inflexible, and cord-cutting is a headwind.
I believe that shares are not nearly worth $65.
Thesis
I am moderately bullish on AT&T (T), as the telecommunication company combines a couple of positives, including strong cash generation, reliable dividend growth, a high dividend yield, and a non-cyclical business model.
There are some negatives as well, though, such as a relatively high debt load that will lead to a significant amount of cash flows being dedicated for debt reduction, and a relatively low earnings growth rate.
I believe that AT&T's shares are undervalued at the current level and that the fair value is somewhere in the high $30s. In a recent article here on Seeking Alpha, the author argued that AT&T's shares are worth between $65 and $117. I believe that these fair value estimates are too high.
