AT&T Inc. (NYSE: T) reported second-quarter earnings after markets closed on Thursday, and shares got a 1.4% price bump in Friday’s trading. So far this year the company’s shares are up 25%.

But success could be breeding its own demise. AT&T’s dividend yield has narrowed from around 5.6% earlier this year to around 4.3% as investors bid up the shares in a search for returns. Analysts are wondering if the shares are fairly valued, still have headroom or are overbought.

AT&T posted $0.72 in earnings per share (EPS) on $40.52 billion in revenue in the second quarter. Consensus estimates from Thomson Reuters called for $0.72 in EPS on $40.62 billion in revenue. Free cash flow rose to $4.8 billion, and the company said it expects to meet or exceed full-year guidance.

Analysts at Merrill Lynch maintained a Buy rating on the stock and a price objective of $46. They also noted:

Adjusted EBITDA of $13.4bn was -2.7% below our $13.8bn estimate and -1.4% below consensus of $13.59bn. Management noted it is on track to meet or exceed full year guidance of double-digit revenue growth, Adj. EPS growth in the mid-single digit range or better, stable consolidated margins, capex of $22bn (trending to low end), and FCF growth with dividend coverage in the 70s%.

Jefferies removed the telecom giant from its Franchise Picks list on Wednesday but reiterated its Buy rating and raised its price target from $44 to $48 after AT&T reported its results.

Here are other analyst moves we saw:

• Oppenheimer maintained an Outperform rating and raised its price target from $40 to $46.
• Cowen lifted its price target from $44 to $45.
• FBR Capital reiterated its Market Perform Rating and boosted its price target from $38 to $42.
• Raymond James raised its price target from $41 to $44.
• RBC lifted its price target from $41 to $44.

Aside from its still-handsome dividend yield, AT&T has benefited this year from its acquisition of DirecTV and from improvement in its wireless business. Beating guidance may be a requirement for keeping the share price high enough to maintain the current yield.

The stock closed Friday at $43.11, in a 52-week range of $30.97 to $43.89. The consensus price target is $42.27 and the high target is $48. Recent changes may not be included yet in the calculation.

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