On Wednesday, AT&T (NYSE:T) stock rose 1.1% and closed at $28.40. At the closing price, the company’s market capitalization was $203.7 billion. The S&P 500 and the Dow Jones Industrial Average rose 1.2% and 2.4% on the same day, respectively. The broader index rose due to hopes about the $2 trillion stimulus package amid the coronavirus outbreak. Read Is the US Stock Market Crash Worse than China’s? to learn more.
As of Wednesday, AT&T stock was trading 28.5% below its 52-week high of $39.70 and 8.9% above its 52-week low of $26.08. On a YTD (year-to-date) basis, AT&T stock has fallen 27.3% as of Wednesday. The stock price has fallen 13.6% in the trailing five-day period, while it has fallen 7.7% in the trailing 12-month period.
Given such a steep fall YTD, has AT&T’s stock price bottomed out? First, we’ll look at analysts’ expectations for 2020 and 2021.
AT&T’s growth projection
Wall Street analysts expect AT&T to post sales of $44.6 billion in the first quarter. The figure would mark a fall of 0.5% YoY (year-over-year) compared to $44.8 billion in the first quarter of 2019. Also, analysts expect the company to post an adjusted EPS of $0.86 in the first quarter as compared to $0.86 in the same quarter last year. Currently, analysts expect a 0.1% and 0.4% rise in the company’s 2020 and 2021 sales, respectively. Meanwhile, they expect an adjusted EPS of $3.59 and $3.81 in 2020 and 2021, respectively.
T-Mobile (NYSE:TMUS) will likely post sales of $11.5 billion in the first quarter—a rise of 4.0% YoY from sales of $11.1 billion in the first quarter of 2019. Also, analysts expect an adjusted EPS of $1.01 in the first quarter compared to $1.06 in the first quarter of 2019. Analysts expect Sprint (NYSE:S) to post an adjusted EPS of -$0.06 on revenue of $8.0 billion in the fourth quarter of fiscal 2019 ending March 31.
Analysts’ recommendations for AT&T stock
On Wednesday, Citi analyst Michael Rollins reduced its target price on AT&T stock from $42 to $31. However, the analyst maintained his “buy” rating on the stock. According to a report from TheFly, “The analyst updated the industry outlook for communication services to reflect the direct and economic risks associated with the spread of COVID-19.” The report also said, “While wireless and the communications space broadly are relatively defensive, there are risks of possible economic weakness and/or recession over the next 12-months.”
Among the 32 analysts covering AT&T stock, 11 have a “buy” rating on the stock—down from 13 last month. About 19 analysts have a “hold” rating on the stock—up from 16 last month. Only two analysts have a “sell” recommendation on the stock—unchanged from the last month.
Currently, analysts have a 12-month target price of $38.54 on AT&T stock. On Wednesday, the stock was trading at a discount of 35.7% to analysts’ 12-month target price. The median target price was $39 on the same date.
T-Mobile and Sprint have average broker target prices of $100 and $7.28, respectively. The figures indicate returns of 26.3% and -8.9%, respectively, over the next 12 months.
AT&T stock returns
AT&T stock closed 14.2% below its 20-day moving average of $33.09 on Wednesday. However, the stock was 21.2% and 23.9% below its 50-day and 100-day moving averages of $36.04 and $37.31, respectively. AT&T’s 14-day MACD is -3.12, which denotes a downward trading trend. With a 14-day relative strength index score of 35.2, the stock is trading near the “oversold” level.
AT&T has an upper Bollinger Band level of $40.17. The company’s middle Bollinger Band level is $33.45, while its lower Bollinger Band level is $26.73. On Wednesday, AT&T stock closed near its lower Bollinger Band level, which also indicates that it’s oversold.
On Wednesday, T-Mobile stock rose 0.7% and closed the trading day at $79.17, while Sprint stock fell 0.4% and closed at $7.99. The proposed $26.5 billion merger agreement between Sprint and T-Mobile is still pending. Read T-Mobile and Sprint Merger Closure Might Get Delayed to learn more.
AT&T’s dividend yield was 7.32% as of Wednesday. To learn more, read AT&T Withdraws Share Buyback Plan amid Coronavirus and AT&T Stock Fell 9% Due to Analyst Downgrade.