AT&T Inc. (NYSE:T) stock fell 0.23% (As on Apr 12, 2:04:22 AM UTC-4, Source: Google Finance) after the investors adjusted for the completion of its $43 billon media merge with Discovery  that will begin trading later today. Warner Bros Discovery Inc. will trade on the Nasdaq under the ticker symbol ‘WBD’ today, after A&T’s decision to spin-off its interest in WarnerMedia earlier this year. AT&T shareholders will own 71% of the combined group, with the remaining 29% taken-up by Discovery shareholders. The move leaves the newly-created group with a fleet of media assets including the Discovery Channel, Warner Bros. Entertainment, CNN, HBO and the Cartoon Network as well as lucrative streaming services such as HBO Max and Discovery+.

AT&T shares were marked 19.2% lower in early afternoon trading Monday to change hands at $19.53 each while the new Warner Bros Discovery shares were marked 1.9% lower at $24.00 each.  The deal closure also cements AT&T as a “core communications services business with strong customer relationships in wireless and fiber to drive recurring revenue, EBITDA and FCF growth,” according to JPMorgan analyst Philip Cusick, who resumed his coverage of the stock with an overweight rating and a $22 price target. As per the analyst, the company has been investing in its wireless network with its 5G build out as well as expanding its fiber footprint to 30 million locations by 2025. The network enhancements support wireless subscriber and service revenue growth in Mobility and broadband services in Consumer and Business Wireline. Futher, as per the analyst, along with revenue growth, there will be cost savings support margin improvements across all the business segments and corporate level.

Meanwhile, the group has reiterated its plan to pay an “attractive” annual dividend of around $8 billion after the close of the WarnerMedia/Discovery deal, a figure that represents a payout ratio of around 40% against its free cash flow forecast of $20 billion. That payout, will still allow for around $48 billion in new investments as it expands its 5G wireless and fiber interest services as part of its shift towards a ‘pure play’ telecoms group. It wants to double its fiber network and expand its 5G network to 200 million homes, and sees capital investments of $24 billion this financial year and $20 billion in 2024. After 2023, the company expects to ramp down capital investment, which will support free-cash flow growth further