Sign InSummary
AT&T's stock is currently in an oversold position and experiencing a bearish trend, but there is potential for a rebound in the short term, and the upcoming earnings announcement may impact the stock price; overall, the stock is evaluated as a 'Hold' with caution and optimism. (Date of analysis: July 17, 2023)
Introduction
AT&T Inc. (Ticker: T) is being analyzed based on given data concerning its historical and recent performance, supplemented by relevant news reports. The telecommunications company was last traded on the New York Stock Exchange (NYSE) on July 17, 2023, at a closing price of $13.53, marking a 6.69% or $0.97 decrease.
Technical Analysis
The 14-day relative strength index (RSI14) for AT&T is at 18, indicating that it may be in an oversold position. This suggests the stock has been heavily sold recently but may be due to experience a price reversal.
The stock's 50-day moving average (50 DMA) is at $16.00, and the 200-day moving average (200 DMA) is $17.85. The stock's price, therefore, lies well below both these averages, indicating a bearish trend. The company's Moving Average Convergence Divergence (MACD) for the past three months stands at -0.06297, adding to the current bearish sentiment.
Fundamental Analysis
AT&T has a market capitalization of $96.73 billion, fueled by an outstanding share number of 7.15 billion. However, it has a negative earnings per share (EPS) of $1.18, which has also resulted in a negative price-to-earnings (PE) ratio of -11.47. The company's negative profitability ratios raise concerns about its earnings potential and financial health.
The discounted cash flow (DCF) stands at $14.02, which is a bit higher than the current stock price. This could imply that the stock is currently undervalued.
The consensus target price is $28.6, with a median price target of $28, a high target of $41, and a low target of $20. These predictions suggest substantial growth potential, though it should be taken with caution due to recent weakness in the stock's performance.
Relevant News
The stock has recently been highlighted in various news reports. Most notable are reports of AT&T shares falling to their lowest price since 1993 after an investigation into toxic lead cables, contributing significantly to the stock's recent poor performance.
This downturn, combined with a broader drop in large brand names like Ford and Verizon, has sparked speculation from investors who see potential for a recovery or 'bounce' in share prices. Mike Khouw from Optimize Advisors has indicated traders are making a low-risk bet on this rebound for AT&T.
Next Trading Day and Week Predictions
Given the disparity between the moving averages and its last close, AT&T's stock is predicted to experience significant short-term volatility. The oversold status indicated by the RSI and a DCF analysis slightly higher than the current trading price suggest that an upward correction may occur, bringing the stock price closer to its 50 DMA, around $16.
Moreover, earnings will be announced on July 26, 2023, which could further influence the stock price, depending on whether the company meets, exceeds, or falls short of analyst expectations.
Final Evaluation
Keeping recent market activity and news into account, along with fundamental and technical indicators, AT&T's stock is currently evaluated as a 'Hold'. Its low performance across many metrics signals caution, though expectations for a gentle rebound in the near future provide some optimism.
Users should monitor this stock and forthcoming earnings announcement closely for potential shifts in performance. Any future investment decisions should factor in market trends, relevant news, and financial data, with due regard given to individual risk tolerance and investment horizons.
