AT&T Inc
AT&T Inc. (NYSE: T) is a holding company. The Company is a provider of telecommunications and technology services globally. The Company operates through two segments, namely Communications and Latin America. The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the United States and globally.
Recent Financial and Business Updates:
- AT&T Inc. witnessed continuous growth in its 5G and fiber subscriber base during the first quarter, achieving notable milestones in customer acquisitions. The company added 424,000 postpaid phone subscribers, maintaining an impressive streak of 11 consecutive quarters with over 400,000 net additions and ensuring low postpaid phone churn. Additionally, AT&T Fiber experienced significant growth, with the addition of 272,000 subscribers, marking 13 straight quarters with over 200,000 net additions.
- These high-quality customer gains played a crucial role in driving revenue growth, as evidenced by the remarkable achievements during the period. Domestic wireless service revenues surged by 5.2%, and the first-quarter Mobility operating income reached its highest-ever level. Consumer broadband revenues also saw a substantial increase of 7.3%, primarily driven by an impressive 30.7% growth in AT&T Fiber revenue.
- AT&T's commitment to expanding and enhancing its network was evident throughout this period. The company successfully extended its mid-band 5G spectrum coverage to reach more than 160 million people, and its reliable nationwide 5G service was made available to approximately 290 million people. On the fiber front, AT&T demonstrated its capability to provide services to over 19.7 million consumers and more than 3 million business customer locations across 100 U.S. metro areas. Moreover, the company remains on track to achieve its target of 30 million fiber locations by the end of 2025.
- The company's transformative initiatives have been yielding positive results for margin growth, with AT&T making significant progress towards achieving its annual cost savings target of over USD 6 billion before the year's end.
- In terms of financial performance, the first-quarter results were as follows: Revenues amounted to USD 30.1 billion, while diluted earnings per share from continuing operations were USD 0.57, compared to USD 0.65 in the previous year. Adjusted earnings per share from continuing operations stood at USD 0.60, compared to USD 0.63 in the prior year. The company generated USD 6.7 billion in cash from operating activities, with capital expenditures totaling USD 4.3 billion and a capital investment of USD 6.4 billion. Finally, AT&T achieved free cash flow of USD 1.0 billion.
- AT&T experienced a sharp decline in its share value on July 17, 2023, dropping nearly 7% to reach its lowest level in three decades. Thes stock witness selloff ater a report, on July 9, implicated AT&T, along with Verizon and other telecom giants, in abandoning a vast network of toxic lead cables buried underground across the United States. These cables pose a significant risk of contaminating neighboring soil and drinking water sources. The potential financial risks associated with the toxic lead cables create a substantial "long-term overhang" for AT&T's stock, given the company's extensive network coverage, reaching approximately 40% of U.S. households.
Technical Observation (on the daily chart)
The price of T stock has shown a consistent downward trend and has made 52-week low on July 17, 2023, with the update on toxic lead cables. Currently, the stock is near an important support zone of USD 12.00-USD 13.00, from where price has taken support in the past. A breakout in upward direction from the range of USD 14.50-USD 15.00, would likely initiate a new short-term trend in the up direction with targets of USD 16.00-USD 16.50 levels. The RSI (14 period) momentum indicator is at an oversold value of 18.11, with expectations of some consolidation or a short-term upside momentum. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to AT&T Inc. (NYSE: T) at the closing price of USD 13.53 as of July 17, 2023.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is July 17, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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