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

Zacks Equity Research

In the latest trading session, AT&T (T) closed at $39.10, marking a +0.1% move from the previous day. The stock lagged the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.56%.

Prior to today's trading, shares of the telecommunications company had gained 2.28% over the past month. This has lagged the Computer and Technology sector's gain of 6.72% and the S&P 500's gain of 4.69% in that time.

T will be looking to display strength as it nears its next earnings release, which is expected to be January 29, 2020. The company is expected to report EPS of $0.88, up 2.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $46.99 billion, down 2.1% from the prior-year quarter.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% lower. T currently has a Zacks Rank of #3 (Hold).

Investors should also note T's current valuation metrics, including its Forward P/E ratio of 10.83. Its industry sports an average Forward P/E of 14.47, so we one might conclude that T is trading at a discount comparatively.

Also, we should mention that T has a PEG ratio of 2.45. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Wireless National industry currently had an average PEG ratio of 3.13 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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