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AT&T (T) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

AT&T (T) closed at $38.24 in the latest trading session, marking a -0.6% move from the prior day. This move lagged the S&P 500's daily gain of 0.69%. Elsewhere, the Dow gained 0.22%, while the tech-heavy Nasdaq added 0.91%.

Prior to today's trading, shares of the telecommunications company had gained 3.55% over the past month. This has outpaced the Computer and Technology sector's loss of 0.49% and the S&P 500's loss of 0.61% in that time.

Wall Street will be looking for positivity from T as it approaches its next earnings report date. This is expected to be October 28, 2019. In that report, analysts expect T to post earnings of $0.93 per share. This would mark year-over-year growth of 3.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $45.08 billion, down 1.44% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.56 per share and revenue of $182.20 billion, which would represent changes of +1.14% and +6.7%, respectively, from the prior year.

Any recent changes to analyst estimates for T should also be noted by investors. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 0.17% lower. T is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, T is currently trading at a Forward P/E ratio of 10.81. Its industry sports an average Forward P/E of 13.63, so we one might conclude that T is trading at a discount comparatively.

It is also worth noting that T currently has a PEG ratio of 2.43. 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 2.75 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 79, putting it in the top 31% 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.

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


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