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AT&T (T) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, AT&T (T) closed at $28.39, marking a +1.25% move from the previous day. This move lagged the S&P 500's daily gain of 1.61%. Meanwhile, the Dow gained 1.51%, and the Nasdaq, a tech-heavy index, added 1.87%.

Coming into today, shares of the telecommunications company had lost 6.22% in the past month. In that same time, the Computer and Technology sector lost 4.69%, while the S&P 500 lost 4.08%.

Wall Street will be looking for positivity from T as it approaches its next earnings report date. This is expected to be October 22, 2020. In that report, analysts expect T to post earnings of $0.77 per share. This would mark a year-over-year decline of 18.09%. Meanwhile, our latest consensus estimate is calling for revenue of $41.65 billion, down 6.59% from the prior-year quarter.

T's full-year Zacks Consensus Estimates are calling for earnings of $3.21 per share and revenue of $169.52 billion. These results would represent year-over-year changes of -10.08% and -6.44%, respectively.

It is also important to note the recent changes to analyst estimates for T. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% lower. T is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, T is currently trading at a Forward P/E ratio of 8.75. For comparison, its industry has an average Forward P/E of 23.89, which means T is trading at a discount to the group.

We can also see that T currently has a PEG ratio of 1.58. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Wireless National stocks are, on average, holding a PEG ratio of 4.21 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 116, which puts it in the top 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow T in the coming trading sessions, be sure to utilize Zacks.com.


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