Sign InAT&T Inc. (T) Stock: Technical and Fundamental Analysis; Outlook and Recommendation
Summary
Despite negative technical and fundamental indicators, AT&T has the potential for a rebound and substantial gains if positive news and developments occur, but for now, the recommendation is to 'Hold' the stock and monitor news regarding the company's lead cables issue that could impact its performance in the near future. (Analysis date: July 18, 2023)
AT&T Inc. (T) Stock Analysis
Technical Analysis
Upon analysis of AT&T's technical indicators, the stock ended the trading session on July 18, 2023, slightly down at $13.45 with a slight 0.59% drop. The stock's intraday range was quite tight between $13.43 and $13.99. Technically, the stock is trading below its 50-day and 200-day moving averages, at $15.93 and $17.84 respectively, indicating prevailing negative sentiment towards this stock.
The 14-day Relative Strength Index (RSI) is registering a very low reading of 12, which commonly indicates oversold conditions. Such conditions may suggest a potential for a technical rebound although continued selling pressure can still persist. The MACD, a momentum indicator, yields negative readings, suggesting the continuation of a downtrend.
Fundamental Analysis
Looking at AT&T's fundamentals, a glaringly negative EPS of -1.18 and negative PE of -11.4 brings into question the company's current profitability. At the same time, a market cap of $96.15 billion suggests that the company is indeed a large-cap stock, hence, its movements have a profound effect on sector trends.
Considering the future of AT&T, the target price range suggested by analysts varies significantly from a low of $16 to a high of $41, with a median target of $26. This indicates that, on the upside, the stock offers substantial potential for appreciation.
News Impact
Notably, AT&T shares have been adversely impacted by a series of news regarding the company's legacy lead cables, with the stock experiencing a significant drop to a 30-year low. The latest headlines indicate AT&T has paused previous plans to remove lead cables running underneath Lake Tahoe, pending further negotiations with regulators. The company's handling of the issue will be a matter of focal interest for investors in the near term, and could notably impact the stock's performance.
Outlook and Recommendation
Given the discounted cash flow (DCF) measure at $13.94, which is slightly above the last close price of $13.45, AT&T's share offers a minimal upside potential. But considering the technically oversold condition, and the significantly higher median target price of $26, AT&T could prospectively recover and deliver substantial gains, assuming positive news and developments occur.
Weighing both the fundamental and technical aspects, as well as factoring in the latest corporate impacts, the recommendation for AT&T Inc. (T) stands at a 'Hold' for the moment. While the upcoming earnings announcement on July 26, 2023, may provide more definitive direction, it's currently advisable to watch for further news and developments about the company's lead cables issue that could potentially influence the stock's performance in the near future.
