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Are the Bears Closing in on Telecom Stocks?

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

What’s T-Mobile Stock Doing about the Fall in the Stock Market?

T-Mobile stock down over 9.3%

T-Mobile (TMUS) stock was trading at $59.20 by the end of February 9, 2018, which represents a decline of ~9.3% from its closing price on January 26. T-Mobile is now trading ~8.4% above its 52-week low of $54.60 and ~14.1% below its 52-week high of $68.88.

This telecom company’s stock price has fallen ~6.9% in the trailing-five-day period as of February 9.

What&#8217;s T-Mobile Stock Doing about the Fall in the Stock Market?

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T-Mobile’s recent price fall has meant that it’s now trading below its moving averages. The stock is now trading ~4.4% below its 100-day moving average of $61.90, ~6.3% below its 50-day moving average of $63.17, and ~6.4% below its 20-day moving average of $63.23.

T-Mobile’s stock decline means that it’s now closer to oversold territory, with a 14-day RSI (relative strength index) score of 31. 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.

T-Mobile trading at a discount of 27% to median target estimates

T-Mobile released its 4Q17 financial results on February 8, 2018. T-Mobile added approximately 1.1 million net postpaid customers in 4Q17, including 891,000 postpaid phone customer net additions during the same quarter. The company also added 149,000 prepaid customers in 4Q17.

By comparison, Verizon Communications (VZ) gained 431,000 postpaid phone net customers in 4Q17, whereas AT&T (T) gained 329,000 postpaid phone net customers during the same period. Meanwhile, Sprint (S) reported 184,000 postpaid phone customer net additions in fiscal 3Q17 (quarter ending December 2017).

The recent sell-off on Wall Street also means that T-Mobile will now be trading at a discount to the analysts’ median estimate. Of the 29 analysts tracking T-Mobile, 25 have recommended a “buy,” while three 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 T-Mobile is now $73.04, with a median target of $75. The stock is thus trading at a discount of ~26.7% to median estimates.

Continue to the next part of this series for a look at how Sprint is responding to the recent rout on Wall Street.

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