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AT&T (NYSE:T ) has been a lightning rod for analysts' opinion ever since it announced the spin-off of Time Warner to Discovery (DISCA) last year.

Investor interest in AT&T is reflected in the fact that 33 articles have been written about AT&T on Seeking Alpha since January 1, 2022.

The main reason for the variety of opinions and varied analyst coverage is that the transaction with Discovery is very complicated and difficult to understand. And with a close mid-year, the financial ins and outs are both affecting 2022 and 2023.

Then add in the fact that AT&T shareholders will end up owning 71% of the new Discovery (Time Warner Discovery) and the math for future values of both surviving entities adds to the confusion.

But the investment decision is really not that complicated. Will AT&T be better off without the complexities of Time Warner and will Discovery be able to enhance the value of those same Time Warner assets to the benefit of both companies' shareholders?

I think the answer is easily a "Yes" to both questions.

In their recent earnings call, AT&T estimated 2022 profits at $3.10 to $3.15 per share. Even using simple 8 times earnings would give a T price of about $25 versus the current price (February 2) of $24.

But, of course, the projected 2022 earnings number is attached to the dreaded earnings term "Adjusted". In this case, what does "adjusted" mean?

7. The company expects adjustments to 2022 reported diluted EPS (that excludes any impact of adoption of new accounting standards) to include merger-related amortization in the range of $1 billion per quarter (prior to close of the WarnerMedia-Discovery transaction) and other adjustments, the proportionate share of intangible amortization at the DIRECTV equity method investment in the range of $1.5 billion, a non-cash mark-to-market benefit plan gain/loss, and other items. The company expects the mark-to-market adjustment, which is driven by interest rates and investment returns that are not reasonably estimable at this time, to be a significant item. Our 2022 EPS depends on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between these projected non-GAAP metrics and the reported GAAP metrics without unreasonable effort.

To say that 135-word description of adjustments is incomprehensible would be generous. Only the last sentence encapsulates the entire process. And we certainly would not expect AT&T to put in an "unreasonable effort".

That also explains why the current T price sits at less than 8 times the incomprehensible earnings estimate of $3.10 - $3.15.

So the answer to the question "How Were AT&T Stock Earnings?" is: who knows?

With the above caveats in place, the 4th quarter 2021 financial metrics look pretty good.

Note that all items were up from Q4 2021 (subject to adjustments of course).

One of the financial measures that were much better in 2021 was the Net Debt/EBITDA number which was 2.6x.

And, the debt side of the calculation is due to come down substantially when the Time-Warner deal is computed and AT&T's debt will decrease by $43 billion. In addition, there are another $7 billion in dispositions that should close this year.

Offsetting that will be the spectrum auctions that T is bidding on adding up to $10s of billions more debt.

Note the year-end 2021 numbers are lower than 2018 and 2020 and about the same as 2015.

As the date of the Discovery deal approaches, AT&T's forecast must include the value of the subsequent 71% of Discovery that T shareholders will own.

With the addition of Time Warner, Discovery will have revenue of $52 billion and be the largest streaming engine in the world.

Then if you compare those revenue numbers with current MV (Market Value) you see a huge distortion. Keep in mind MV is as of today not at the end of 2022 or 2023 therefore Discovery's MV will certainly be higher, but not nearly as high as the other two indicating a huge potential upside for Time-Warner Discovery if they can pay down their huge debt and grow the business too.

You can see my analysis of the deal here "AT&T Stock Forecast: The Discovery Deal And Big Gains Are Both Coming In 2022"

and here "The Market Hates The AT&T/Discovery Deal, But Is That The Correct Analysis? Nope, Big Capital Gains Coming By 2025".

With all the mystery and fuzzy numbers being floated about, AT&T has a mixed analyst rating. Looking at the recent Seeking Alpha articles since January 1, I see 20 Buys, 11 Holds but only 1 sell.

But from MarketWatch, the outlook is much more muted with only 7 buys and 17 holds. So it appears Seeking Alpha authors think more highly than most market watchers. Personally, I find SA articles more informative than other sites such as MarketWatch and Motley Fool.

As for me, I rate AT&T a buy because I feel it is undervalued as a competitor to Verizon (VZ) and T-Mobile (TMO) and that the Time Warner Discovery team will make the new entity a big winner in the streaming wars.

My recommendation is to buy T now and hold both shares until the end of 2023 and see a combined value of at least $40

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Disclosure: I/we have a beneficial long position in the shares of T either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.