AT&T Inc. (T) is the second-largest wireless service provider in North America and one of the world’s leading communications service carriers. Based in Dallas, Texas, the company boasts a market cap of $122.75 billion. It operates through the Communications and Latin America segments and offers a wide range of communication and business solutions, including wireless, local exchange, long-distance, data/broadband, and Internet, wholesale, and cloud-based services.
Shares of this large-cap telecom giant have underperformed the broader market considerably over the past year. T has gained 10.7% over this time frame, while the S&P 500 Index ($SPX) has rallied 25.2%. In 2024, T stock has gained 2.3%, while the SPX is up 10.4% on a YTD basis.
Narrowing the focus, T’s underperformance over the past 52 weeks looks even more pronounced in comparison to the Communication Services Select Sector SPDR Fund (XLC). The exchange-traded fund has gained about 33% over the past year. Moreover, the ETF’s 13.8% returns on a YTD basis outshine the stock’s marginal gains over the same time frame.
T’s weak price action relative to the broader indexes over the past year can be attributed to the slowing wireless subscriber growth due to market saturation and increased competition in the wireless sector. Moreover, hackers stealing sensitive information belonging to millions of AT&T’s current and former customers and sharing it on the dark web concerned investors.
For the current fiscal year, ending in December, analysts expect T to report an EPS decline of 7.1% to $2.24 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 19 analysts covering T stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” and eight “Holds.”
This configuration is slightly more bullish than a month ago, with eight analysts suggesting a “Strong Buy” and two giving a “Moderate Buy.”
Recently, Barclays analyst Kannan Venkateshwar upgraded the stock from an equal weight (Hold) to an overweight (Buy) rating but kept the price target unchanged at $20.
The mean price target of $21.09 represents a 23.2% premium to T’s current price levels. The Street-high price target of $29 suggests an ambitious upside potential of 69.4%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
