Why AT&T Stock Hasn’t Had a Great Start This Week

AT&T (T) stock fell about 1.6% on September 16. The stock closed the trading day at $37.31. It was trading 3.72% below the 52-week high of $38.75 it saw on September 11. Meanwhile, the stock was trading 39.22% above the 52-week low of $26.80 it saw on December 26, 2018.

AT&T stock has returned around 30.7% YTD (year-to-date). However, it was down about 1.06% in today’s trading session as of 10:48 AM ET. It was also down in premarket trading.

We believe part of this fall could be the result of a lawsuit alleging that AT&T misled shareholders about the growth of its over-the-top service, DIRECTV NOW. According to a CNET report on September 16, “AT&T is facing a lawsuit alleging it created fake customer accounts to make it look like DirecTV Now was seeing customer growth ahead of the company’s merger with Time Warner.” The report added, “AT&T encouraged its employees to add the service to customers’ accounts without their knowledge.”

Last week, AT&T warned that weakness in its wireless equipment unit could hurt its consolidated third-quarter revenue. The company also expects the third-quarter revenue of its WarnerMedia segment to fall approximately $400 million from the corresponding quarter a year ago.

For the third quarter, analysts expect AT&T to post total revenue of $45.28 billion, a fall of 1.0% from $45.74 billion in the third quarter of 2018.

Overall, analysts favor “buy” ratings on AT&T, with 15 out of 28 analysts giving it “buys.” On September 16, 53.6% of analysts gave it “buy” ratings, while 42.9% gave it “hold” ratings. Only 3.5% of analysts gave it “sell” ratings.

Currently, analysts have a 12-month target price of $35.88 on AT&T stock. On September 16, the stock was trading at a premium of 3.8% to analysts’ 12-month target price. Its median target price was $38.00 on the same date.

The stock’s trailing-five-day, trailing-one-month, and trailing-12-month price movements were 1.4%, 6.7%, and 11.0%, respectively. Based on its closing price on September 16, AT&T stock was trading 3.6% above its 20-day moving average of $36.03. It was trading 7.5% above its 50-day moving average of $34.71.

AT&T was trading 12.1% above its 100-day moving average of $33.28. With a 14-day RSI (relative strength index) score of 63.07, the stock is approaching the overbought zone.

On September 16, AT&T stock closed near its Bollinger Band upper range level of $38.53, which shows that it’s been overbought.

On the same day, Sprint (S) stock rose 0.15% and closed at $6.84. T-Mobile (TMUS) stock rose 0.20% to $79.56. T-Mobile and Sprint have returned 25.1% and 17.5%, respectively, year-to-date.

AT&T’s market cap was $272.6 billion on September 16. Sprint and T-Mobile have market caps of $28.0 billion and $68.0 billion, respectively.

On September 9, Elliott Management revealed that it had bought a stake worth $3.2 billion in AT&T. The hedge fund wrote a letter to the company in which it recommended it restructure its business. To learn more about Elliott’s suggestions, check out Should AT&T Be on Your Shopping List in September?