AT&T Withdraws Share Buyback Plan amid Coronavirus

On March 20, AT&T (NYSE:T) stock fell 8.7% and closed at $28.45. At the closing price, the company’s market capitalization was $204.1 billion. The Dow Jones Industrial Average and the S&P 500 fell 4.6% and 4.3% on the same day, respectively. The stock market crash is due to the coronavirus outbreak. Read US Stock Market Crash: What Does It Mean? to learn more.

As of March 20, AT&T stock was trading 28.3% below its 52-week high of $39.70 and 1.0% above its 52-week low of $28.18. On a YTD (year-to-date) basis, AT&T stock has lost 27.2% as of March 20. The stock price has fallen 17.5% in the trailing five-day period, while it has fallen 6.8% in the trailing 12-month period.

AT&T withdraws share buyback plan

On March 20, AT&T announced that it canceled its $4 billion accelerated share repurchase plan scheduled to take place in the second quarter. The company said that the cancelation is due to the coronavirus outbreak. According to a FierceWireless report, AT&T said, “While our business continues to operate effectively during the COVID-19 global pandemic, we have decided at this time to cancel this ASR agreement and any other repurchases to maintain flexibility and focus on continued investment in serving our customers, taking care of our employees and enhancing our network, including nationwide 5G.”

The report also said that AT&T isn’t able to estimate the impact that the coronavirus pandemic will have on the business.

AT&T stock downgraded

AT&T stock got a jolt today. At 10:05 AM ET, the stock was trading 3.2% lower at $27.55. The stock also fell in the pre-market session. Cowen and Company analyst Colby Synesael downgraded AT&T stock to “market perform” from “outperform” due to the coronavirus outbreak. The analyst also reduced its target price on the stock from $43 to $37. According to a report from TheFly, “The analyst expects fundamentals within WarnerMedia to be pressured including HBO Max. Although valuation is cheap, he thinks it is unlikely the company will beat the market either on a continued selloff or eventual recovery.”

Baird analyst William Power also downgraded AT&T stock to “neutral” from “outperform.” The analyst reduced its target price on the stock from $41 to $33. According to a report from TheFly, “The analyst believes it is facing significant headwinds as the loss of live sports coupled with increasing economic hardships, could accelerate video cord cutting trends creating both headline and operating risks.”

Analysts’ recommendations for AT&T stock

As of March 20, 32 analysts cover AT&T stock. Among the analysts, 11 or ~34.4% of the analysts recommend a “buy,” 19 or ~59.4% recommend a “hold,” and two or ~6.2% recommend a “sell.”

Analysts have an average target price of $38.67 on AT&T. The target price implies a return of 35.9% based on the closing price of $28.45 on March 20. The consensus target price for the stock has fallen from $39.43 in the previous month.

Stock returns

AT&T stock closed 17.3% below its 20-day moving average of $34.39 on March 20. However, the stock was 22.4% and 24.4% below its 50-day and 100-day moving averages of $36.65 and $37.62, respectively. AT&T’s 14-day MACD is -4.42, which shows a downward trading trend. With a 14-day relative strength index score of 32.06, the stock is approaching the “oversold” level.

AT&T has an upper Bollinger Band level of $40.09. The company’s middle Bollinger Band level is $34.91, while its lower Bollinger Band level is $29.73. On March 20, AT&T stock closed near its lower Bollinger Band level, which also shows that it’s oversold.

On March 20, T-Mobile (NYSE:TMUS) stock fell 6.2% and closed the trading day at $74.55, while Sprint (NYSE:S) stock fell 6.4% and closed at $7.50. T-Mobile and Sprint have average broker target prices of $100.00 and $7.28, respectively. The figures suggest returns of 34.1% and -2.9%, respectively, over the next 12 months. The proposed merger deal between Sprint and T-Mobile is still pending. Read T-Mobile and Sprint Merger Deal Nears Completion to learn more.

AT&T’s dividend yield was 7.3% as of March 20. To learn more, read AT&T Stock Fell 9% Due to Analyst Downgrade and AT&T’s Management Is Confident amid Market Turmoil.