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Is It Time for Investors to Exit AT&T Stock?

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On April 3, AT&T (NYSE:T) stock fell 4.5% and closed at $27.46. At that closing price, the market cap was $197.0 billion. Based on the Dow Jones Index futures today, markets look set to start this week on a positive note. Global stock markets rose today as the coronavirus pandemic cases slow in the US and Europe. Read Can US Stock Markets Rise in Q2 after Q1 Crash? to learn more.

As of April 3, AT&T stock was trading 30.8% below its 52-week high of $39.70 and 5.3% above its 52-week low of $26.08. On a YTD (year-to-date) basis, the stock has lost 29.7% as of April 3. The stock price has fallen 8.0% in the trailing five-day period, while it has fallen 13.8% in the trailing 12-month period.

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Analysts reduce AT&T’s target price

Several analysts lowered their target prices on AT&T stock amid the coronavirus outbreak. In March, AT&T withdrew its share repurchase program. The company needs to maintain financial stability and invest in wireless network enhancements. In the last 15 days, analysts made the following downward revisions to the target price:

  • Wells Fargo cut the target price to $28 from $36.
  • Suntrust Robinson cut the target price to $30 from $36.
  • Goldman Sachs lowered the target price to $29 from $35 but maintained a “neutral” rating.
  • J.P. Morgan cut the target price to $35 from $38 with a “neutral” rating.
  • Instinet cut the target price to $39 from $44 but maintained a “buy” rating.
  • Cowen and Company cut the target price to $37 from $43 with a “market perform” rating.
  • Citigroup lowered the target price to $31 from $42 but maintained a “buy” rating.

Analysts have an average target price of $36.70 on AT&T stock, which implies an upside of about 33.6% based on its closing price of $27.46 on April 3.

Ten out of 32 analysts suggested a “buy” on AT&T stock. Meanwhile, 20 analysts suggested a “hold” and two maintained a “sell” rating.

Growth projection

On April 22, AT&T will likely report its first-quarter earnings results before the markets open. For the first quarter, analysts expect the non-GAAP EPS to rise by 0.2% YoY (year-over-year) to $0.86. They also expect AT&T’s revenue to fall by 1.0% YoY to $44.4 billion. The company will likely report pay-TV customer losses in the first quarter.

AT&T has appointed Jason Kilar as WarnerMedia’s new CEO effective May 1. The WarnerMedia unit plans to launch its own video streaming service called “HBO Max” in May. According to a report from The Verge, “HBO Max is more than just an experiment for AT&T. AT&T CEO Randall Stephenson described it as a meaningful business to the company that will play out over the next four to five years.” The report also said, “Being able to transition those cable cutters into paying HBO Max subscribers is AT&T’s big goal.”

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AT&T’s stock performance

On April 3, AT&T stock was trading 10.9% below its 20-day moving average of $30.81. Meanwhile, the stock is trading 21.4% below its 50-day moving average of $34.94 and 25.2% below its 100-day moving average of $36.72. AT&T’s 14-day RSI (relative strength index) score is 37. The RSI indicates that the stock is near the “oversold” level.

AT&T has an upper Bollinger Band level of $36.18. The company’s middle Bollinger Band level is $30.81, while its lower Bollinger Band level is $25.44. On April 3, the stock closed near its lower Bollinger Band level, which indicates that it’s oversold. AT&T’s 14-day MACD is -1.45, which also indicates that the stock is on a downward trading trend.

On April 3, T-Mobile (NYSE:TMUS) stock fell 2.9% and closed the trading day at $81.98. T-Mobile has an average broker target price of $100.20. The figure denotes a return of 22.2% over the next 12 months. Last week, T-Mobile closed its long-awaited merger agreement with Sprint. Read Why Is the T-Mobile and Sprint Merger at Risk? to learn more.

As of April 3, AT&T’s dividend yield was 7.6%. Notably, T-Mobile doesn’t pay equity stock dividends.

For more information about AT&T, read AT&T Falls 3.5% as J.P. Morgan Downgrades Stock and AT&T Stock Is a ‘Buy’ amid the Coronavirus Sell-Off. You can also read AT&T Withdraws Share Buyback Plan amid Coronavirus.

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