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AT&T Stock: Growth Projections and Nationwide 5G Coverage

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On Monday, AT&T (NYSE:T) stock fell 0.7% and closed at $30.11 with a market cap of $214.5 billion. AT&T’s stock price has fallen by 1.3% in the trailing five-day period, while it has fallen by 7.2% in the trailing 12-month period. The stock is trading 24.2% below its 52-week high of $39.70 on November 18, 2019. The stock was also trading 15.5% above its 52-week low of $26.08 on March 23, 2020. On a year-to-date basis, the stock has fallen by 23.0% as of Monday.

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AT&T’s growth projections

On a reported basis, AT&T posted an EPS of $0.63 in the first quarter of 2020 compared to an EPS of $0.56 in the first quarter of 2019. Excluding the net special items, the company reported an EPS of $0.84 in the first quarter compared to an EPS of $0.86 in the same period a year ago. The adjusted EPS met Wall Street’s expectation of $0.84 for the first quarter of 2020. AT&T’s first-quarter revenue fell 4.6% YoY (year-over-year) to $42.8 billion. The revenue missed analysts’ estimate of $43.9 billion.

For the second quarter, Wall Street analysts expect a 9.0% fall in the revenue to $40.9 billion from $45.0 billion in the second quarter of 2019. For 2020, analysts expect a 5.8% fall in the revenue to $170.8 billion from $181.3 billion in 2019. Analysts also hope that the 2021 sales will rise to $173.7 billion.

Analysts hope that the second-quarter adjusted EPS will be lower at $0.80 compared to $0.89 in the second quarter of 2019. For 2020, the adjusted EPS could decline to $3.20 from $3.57 in 2019. Analysts expect that the 2021 adjusted EPS will rise to $3.31.

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5G update

AT&T seeks to reach nationwide 5G coverage this summer. Currently, the company’s 5G network covers nearly 160 million people in 327 markets. According to Fox Business report, AT&T’s EVP of Technology Operations Chris Sambar said, “While many of us have been working from home for the past three months, AT&T’s network team continued to build and test our network so that we could emerge from this season with stronger, broader 5G coverage for our customers across the country.” The report also said, “Whether it’s getting you back to work, back to school, or back to play, we’ve got you covered with the fastest wireless speeds in the nation.”

Analysts’ recommendations for AT&T stock

Most of the Wall Street analysts following AT&T stock still recommend a “hold” rating. Among the 32 analysts following AT&T stock, 19 recommend a “hold,” ten recommend a “buy,” and three recommend a “sell.” The consensus target price of $33.72 per share implies an upside of 12.0% based on AT&T’s closing price of $30.11 on Monday. The consensus target price for the stock has fallen from $33.88 in May—a reduction of 0.5%.

Stock returns

AT&T stock closed 3.4% below its 20-day moving average of $31.18 on Monday. However, the stock was 0.7% and 6.8% below its 50-day and 100-day moving averages of $30.33 and $32.32, respectively. AT&T’s 14-day MACD is -0.96, which indicates a downward trading pattern. With a 14-day relative strength index score of 45, the stock isn’t oversold or overbought.

AT&T has an upper Bollinger Band level of $33.00, while its middle Bollinger Band level is $31.18. On Monday, AT&T stock closed near its lower Bollinger Band level of $29.36, which indicates that the stock is oversold.

Currently, AT&T stock is trading at 9.41x its 2020 estimated adjusted EPS of $3.20. The stock is trading at 9.09x its 2021 estimated adjusted EPS of $3.31. Analysts expect AT&T’s earnings to grow at a CAGR of 1.8% over the next five years.

AT&T stock rose 0.8% in the pre-market trading session today at 8:39 AM ET.  At the same time, T-Mobile (NYSE:TMUS) stock returned -1.5%, respectively. The S&P 500 futures rose 1.04%, while the Dow futures rose 1.16%.

To learn more about AT&T, read Investing in AT&T Stock: 3 Key Updates for Bargain Hunters and Investors Might Want to Hold AT&T Stock after Q1 Results.

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