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Its time to talk about $T otherwise known as AT&T and my thoughts on the stock and company.
Current Price: $29.90
52/Wk High: $39.70
52/Wk Low: $26.08
Read below for the breakdown.
Current Price: $29.90
52/Wk High: $39.70
52/Wk Low: $26.08
Read below for the breakdown.
Virtually everyone knows of the brand AT&T and many are loving the stock of late. Given the nice-looking dividend with a whopping 7% yield as well as an only growing market, the stock on the surface looks great.
AT&T made some major acquisitions over the years. First buying Direct TV for a substantial $49 billion. Then the company went on to Time Warner spending another $104 billion including debt.
Both were thought to be positive but their first acquisition is flailing and seems to have been a bad investment. In Q1 $T reported that Direct TV subscribers declined by one million, just after a 2019 loss of four million subscribers.
Not only that but COVID-19 slowed Warner Media growth as well. AT&T reported a slow down in the media acquisition, with Warner Media only reporting Q1 revenue of $7.4 billion versus the previous years $8.4 billion.
While the acquisitions were seen as great it has only hurt the company on the debt side of things. When last reported AT&T reported a huge $160 billion debt at the end of Q1 and then took out another loan for $5.5 billion in April to protect from COVID-19 headwinds.
The bad news does not stop either. AT&T CEO Randall Stephenson also stepped down a few weeks ago and was replaced today with John Stankey.
On the bright side the center of $T, their wireless business, continues to grow, and the company reported a Q1 YOY revenue growth of 2.5% in the sector.
Furthermore, to boost the wireless game, 5G is advancing and getting ready to boom, which will only be positive for AT&T.
Although there are some catalysts coming up, the financials are not so hot and the Q1 earnings represented that. AT&T reported a Q1 EPS miss of $0.840 versus the expected $0.848 EPS consensus. Revenue also came in low, at a considerable $42.8 billion.
AT&T on the other hand still has a considerable cash position of $9.955 billion, representing a 52.78% YOY increase.
While AT&T has plenty of negative headwinds, analysts are still bullish. Currently, the average price target is $34.41/share representing a 15.08% upside. Secondly, the high price target is $47.00/share, and the low is $24.00/share.
The big money is more fearful of the negative headwinds though. At the moment only 55.59% is owned by institutions. Top holders include Vanguard Group, Blackrock, and State Street Corp.
Finally, the negativity unfortunately does not stop. Recent reports show AT&T is looking to reduce debt and has considered the sale of the Warner Media gaming division as well as closing 250 stores. ( http://fool.com )
In short, while the company does have an attractive dividend, I do not like the short and mid-term story. While I think the stock can go up long term, I believe there are much better names and profitable trades than in $T.
EAT - SLEEP - PROFIT
EAT - SLEEP - PROFIT
Check this breakdown out on my website, as well as all past breakdowns, opinion, analysis, and news.
Link Below: https://www.runningwiththemoney.com/post/at-t-has-more-negative-than-positive
Link Below: https://www.runningwiththemoney.com/post/at-t-has-more-negative-than-positive
Disclaimer: This is not direct financial advice simply opinion based on independent research.
