Currently, AT&T (T) stock is trading at 9.69x its fiscal 2019 estimated EPS of $3.56. The stock is also trading at 9.55x its fiscal 2020 estimated EPS of $3.62. Analysts expect the company’s adjusted EPS to rise 1.1% in fiscal 2019 and 1.7% in fiscal 2020.
AT&T stock’s valuation
AT&T’s earnings are also expected to rise at a compound annual growth rate of 2.2% in the next five years. However, the company’s revenues will likely rise 7.1% in fiscal 2019 and 0.2% in fiscal 2020. The stock looks overvalued considering its earnings growth going forward.
AT&T’s expected five-year PE-to-growth ratio is 4.41x. The stock is overvalued when the ratio is greater than one.
Overall, analysts favor a “buy” rating for AT&T stock. Among the analysts tracking the stock, 53.6% recommended a “buy,” 42.9% recommended a “hold,” and 3.5% recommended a “sell.” On average, analysts’ 12-month target price for the stock is $34.42, which implies a fall of 0.3% from its closing price of $34.54 on August 9. The stock’s median target price is $35.00.
AT&T’s technical levels
On August 9, AT&T stock closed at $34.54, which was unchanged from its previous closing price. The closing price was 0.3% lower than its 52-week high of $34.64 and 28.9% higher than its 52-week low of $26.80. AT&T stock has risen more than 21% year-to-date. The company’s market cap is $252.4 billion.
Based on the closing price on August 9, AT&T stock was trading 2.6% above its 20-day moving average of $33.67, 4.4% above its 50-day moving average of $33.08, and 7.0% above its 100-day moving average of $32.27. On the upside, the company’s immediate key resistance lies near $34.70, while $34.26 could act as an immediate key support level on a daily basis.
AT&T’s 14-day RSI (relative strength index) score was 62, which could be approaching the overbought zone. An RSI score above 70 indicates that a stock could be overbought, while an RSI score below 30 suggests that a stock could be oversold.
AT&T’s adjusted EPS of $0.89 was in line with analysts’ consensus estimate in the second quarter. The company’s earnings fell more than 2% YoY (year-over-year). AT&T’s revenues rose 15.3% YoY to $44.96 billion in the second quarter, which beat analysts’ consensus estimate of $44.85 billion.
On August 9, Sprint stock fell 0.58% and closed at $6.81, while T-Mobile stock fell 0.49% to $77.52.