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

Zacks Equity Research
·3 min read

In the latest trading session, AT&T (T) closed at $29.22, marking a -0.76% move from the previous day. This change lagged the S&P 500's 0.71% gain on the day. Elsewhere, the Dow gained 0.56%, while the tech-heavy Nasdaq added 0.95%.

Coming into today, shares of the telecommunications company had lost 0.67% in the past month. In that same time, the Computer and Technology sector gained 0.85%, while the S&P 500 gained 0.17%.

T will be looking to display strength as it nears its next earnings release, which is expected to be January 27, 2021. On that day, T is projected to report earnings of $0.73 per share, which would represent a year-over-year decline of 17.98%. Meanwhile, our latest consensus estimate is calling for revenue of $44.54 billion, down 4.86% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for T. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 0.4% lower within the past month. T is currently sporting a Zacks Rank of #4 (Sell).

In terms of valuation, T is currently trading at a Forward P/E ratio of 9.16. Its industry sports an average Forward P/E of 22.12, so we one might conclude that T is trading at a discount comparatively.

Meanwhile, T's PEG ratio is currently 3.13. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless National was holding an average PEG ratio of 2.75 at yesterday's closing price.

The Wireless National industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 118, putting it in the top 47% 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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