Sign InSummary
AT&T Inc. closed at $14.05 on August 18, 2023, showing a minor change from the previous day; technical analysis indicates a bearish momentum with the stock trading below its moving averages and the RSI signaling an oversold condition, but the fundamental analysis suggests a long-term buy with attractive price targets and strong analyst recommendations.
Technical Analysis
As of August 18, 2023, AT&T Inc. (Ticker: T), closed at $14.05, marking a minor change of 0.04 (0.29%) from the previous day. The stock traded between a low of $13.95 and a high of $14.14 for the day. The trading volume was 27.32 million shares, slightly below the average volume of 48.05 million shares.
The current price is trending below both the 50-day moving average of $15.03 and the 200-day moving average of $17.64, indicating a bearish momentum. Furthermore, the Relative Strength Index (RSI) is at 35, which leans towards an oversold signal, but not extremely so, indicating there may still be room for downward movement. In addition, the Moving Average Convergence Divergence (MACD) three-month value of -0.2357 suggests a bearish trend over recent months.
The Average True Range (ATR), a measure of price volatility, stands at 1.91. AT&T generated support and resistance levels at $14.01 and $14.59, respectively.
Fundamental Analysis
AT&T has 7.15 billion outstanding shares and a massive market capitalization of $100.44 billion. However, on a less positive note, the company's earnings per share (EPS) stand at negative $1.17, and it currently has a negative price-to-earnings (PE) ratio of -12.01. Considering that a low PE ratio can potentially indicate a company's undervalued status, AT&T's fashionably negative PE ratio suggests a different scenario, i.e., the company is currently reporting losses.
The discounted cash flow (DCF) analysis presents a value of $14.54 per share, which corresponds to a slightly undervalued status based on the current stock price.
The consensus from an analyst survey is a "Buy," with 1 analyst recommendation to "strong buy," 10 analyst suggestions to "buy," 4 analyst opinions to "hold," and only 1 analyst advice to "sell" AT&T stock. The target low, median, high, and consensus prices according to analysts are $16, $26, $41, and $27.73, respectively.
News Influences and Upcoming Events
Recent news surrounding AT&T's dividend suggests that it remains sustainable despite the company's challenging environment. One analyst even changed their stance on AT&T, citing improved wireless and broadband subscriber numbers. Notable is the fact that Ray Dalio's firm added 1.98 million AT&T shares to its portfolio, demonstrating an increased faith in its potential. Looking forward, AT&T's earnings announcement is scheduled for October 18, 2023.
Price Prediction and Conclusion
Based on the available technical and fundamental data and recent news influences, AT&T Inc. is expected to open the market on August 21, 2023, around the last closing price of $14.05. The stock may face initial resistance around $14.59 (it's identified resistance) and support around $14.01(it's identified support). However, the stock may continue trending downwards considering its current bearish momentum as reflected by the RSI and MACD.
For the upcoming week, it would not be surprising to see a continuation of the bearish trend unless a significant positive catalyst acts upon it given the current collective market data. However, it is also important to consider the analyst consensus, which is notably bullish long-term and could start influencing the price later on.
In conclusion, based on the technical analysis, fundamental analysis, and current news, AT&T Inc. would should be categorized as a "Hold" for short-term traders and "Buy" for long-term investors given the attractive long-term price targets and strong buy recommendations from analysts. The company's sustainable dividend and potential for growth support a long-term investment, whereas the short-term technical indicators suggest a possible further drop in price.
