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Are the Bears Closing in on Telecom Stocks?

PART:
1 2 3 4 5 6
Part 2
Are the Bears Closing in on Telecom Stocks? PART 2 OF 6

How AT&T Stock Is Reacting to the Recent Stock Market Fall

AT&T stock down over 4.7%

AT&T (T) stock was trading at $36.05 by the end of February 9, 2018, which represents a ~4.7% fall from its closing price on January 26. AT&T is now trading ~10.8% above its 52-week low of $32.55 and ~15.6% below its 52-week high of $42.70.

The telecom company’s stock price has fallen ~5.3% in the trailing-five-day period as of February 9.

How AT&amp;T Stock Is Reacting to the Recent Stock Market Fall

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AT&T’s recent price fall has meant that it’s now trading below its moving averages. The stock is trading ~1.8% below its 100-day moving average of $36.71, which is ~3.9% below its 50-day moving average of $37.50 and ~3.0% below its 20-day moving average of $37.18.

AT&T’s stock decline means that it’s now closer to oversold territory, with a 14-day RSI (relative strength index) score of 40. Remember, when a stock’s RSI falls below 30, it’s said to be trading in the “oversold” zone. When its RSI goes above 70, the stock is said to be trading in the “overbought” zone.

AT&T trading at a discount of 14% to median target estimates

AT&T released its 4Q17 financial results on January 31, 2018. AT&T posted adjusted EPS (earnings per share) of $0.78 in 4Q17, compared with its adjusted EPS $0.66 in 4Q16. The company reported total revenues of $41.7 billion in 4Q17, which was ~0.4% lower YoY (year-over-year). 

By comparison, Verizon Communications’ (VZ) 4Q17 revenues rose ~5.0% over 4Q16, while Sprint’s (S) revenues fell ~3.6% during the same period. T-Mobile’s (TMUS) revenues rose ~5.1% over 4Q16.

The recent sell-off we’ve seen on Wall Street likely means that AT&T will now be trading at a discount to the analysts’ median estimate. Of the 30 analysts tracking AT&T, ten have recommended a “buy,” while nineteen have recommended a “hold” for the stock, but only one analyst has recommended a “sell” for the stock.

The average 12-month target price for AT&T is now $40.65, with a median target of $41. The stock is trading at a discount of ~13.7% to its median estimates.

Continue to the next part for a closer look at how T-Mobile stock is responding to the recent action on Wall Street.

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