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AT&T Stock: How Much Downside Do Analysts See?

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AT&T (T) stock rose almost 4.6% in the week ended September 13 to close at $37.91. AT&T stock has been rising since the beginning of 2019 after struggling in 2018. The stock has returned around 32.8% YTD (year-to-date). However, AT&T stock fell 1.2% on September 13 and closed at $37.91. At the closing price of $37.91, AT&T’s market cap is $277.0 billion.

AT&T stock has outperformed T-Mobile (TMUS), Sprint (S), and the broader markets this year. While T-Mobile has gained 24.8%, Sprint has risen 17.4% YTD. The S&P 500 has risen 10.7% during the same period.

AT&T stock has generated returns of 12.6% in the last 12 months. The stock is trading 2.2% lower than its 52-week high of $38.75. The company is trading 41.5% higher than its 52-week low of $26.80.

T-Mobile and Sprint have risen 16.0% and 7.4%, respectively, in the trailing 12-month period. On September 13, Sprint stock fell 1.16% and closed at $6.83, while T-Mobile stock fell 0.36% to $79.40.

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Analysts on AT&T stock

As of September 13, according to a recent Reuters survey, which included 28 investment research companies covering AT&T stock, 53.6% of analysts have “buy” recommendations on the stock, 42.9% of them have given it a “hold,” and the remaining 3.5% of them have given it a “sell.”

On September 13, analysts had a consensus 12-month target price of $35.88 on AT&T, which implies a downside potential of 5.4% from its last closing price of $37.91. The target price has risen from $34.54 a month ago.

AT&T stock: Technical levels

Based on its closing price on September 13, AT&T stock was trading 5.5% above its 20-day moving average of $35.92. The stock was trading 9.4% above its 50-day moving average of $34.65. AT&T was trading 14.1% above its 100-day moving average of $33.22. On the downside, the company’s immediate key support lies near $37.65, while $38.26 could act as an immediate key resistance level on a daily basis.

In the trading session on September 13, AT&T stock closed near its upper Bollinger Band level of $38.39. The value indicates that the stock is overbought. Investors could take the value as a “sell” signal.

With a 14-day relative strength index number of 70.44, AT&T stock is in the overbought territory. AT&T’s 14-day MACD (moving average convergence divergence) is 2.08. A positive MACD number indicates an upward trading trend.

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Revenue and earnings expansion

In the second quarter, AT&T reported revenue of $44.96 billion, a rise of 15.3% YoY (year-over-year). Its non-GAAP (generally accepted accounting principles) EPS was $0.89. Analysts had expected AT&T to post revenue of $44.85 billion and adjusted EPS of $0.89 in the second quarter.

Analysts expect AT&T’s revenue to fall 1.0% YoY to $45.28 billion in the third quarter and to rise 7.0% YoY to $182.64 billion in 2019. Wall Street expects AT&T’s adjusted EPS to rise 3.3% YoY to $0.93 in the third quarter and 1.1% YoY to $3.56 in 2019.

Last week, AT&T’s management updated investors with some trends affecting its third-quarter results. In the third quarter, AT&T expects that the weakness in its wireless equipment segment could be harmful to its consolidated revenue. For more info, read AT&T: Weak Q3 Results Could Weigh on Its Stock.

To learn more about Elliott’s Management’s stake in AT&T, check out Should AT&T Be on Your Shopping List in September?

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