AT&T (T, $28.94) shares downgraded at KeyBanc

Analysts at KeyBanc downgraded shares of AT&T to Underweight from Sector Weight.

The analysts have a price target of $25 on the telecom company’s shares. The price target implies downside from the stock's current price.

The analysts anticipate challenges for AT&T. Analysts’ revenue and adj. EBITDA estimates are 1.5% and 5.9% lower than consensus in 3Q, respectively. For AT&T’s Warner Media operations, analysts expect the combination of return to sports and added expense associated with HBO Max to affect bottom line.

In the Entertainment segment, cord-cutting and programming costs are pressuring profitability.

Analysts also noted, “We are lowering our Postpaid phone-only ARPU by $0.27 to $54.88. We are also lowering our Total video subscriber net additions to -1.1M from -900K. We expect industry wide video subscriber losses to be modestly worse, which drives our Turner subscription estimates lower. Our 2020 revenue and EBITDA estimates move lower by $407M and $180M, respectively, as a result of these changes.”

Tickeron's analysis shows: T's RSI Indicator ascending out of oversold territory

The RSI Indicator for T moved out of oversold territory on September 28, 2020. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 24 similar instances when the indicator left oversold territory. In 14 of the 24 cases the stock moved higher. This puts the odds of a move higher at 58%.

Current price $28.94 crossed the support line at $28.74 and is trading between $29.13 support and $28.74 support lines. Throughout the month of 09/02/20 - 10/05/20, the price experienced a -3% Downtrend, while the week of 09/28/20 - 10/05/20 shows a +1% Uptrend.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Indicator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 29 of 59 cases where T's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 49%.

The Momentum Indicator moved above the 0 level on October 05, 2020. You may want to consider a long position or call options on T as a result. In 31 of 82 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 38%.

The Moving Average Convergence Divergence (MACD) for T just turned positive on October 02, 2020. Looking at past instances where T's MACD turned positive, the stock continued to rise in 20 of 49 cases over the following month. The odds of a continued upward trend are 41%.

Following a +0.63% 3-day Advance, the price is estimated to grow further. Considering data from situations where T advanced for three days, in 146 of 339 cases, the price rose further within the following month. The odds of a continued upward trend are 43%.

T may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

Bearish Trend Analysis

T moved below its 50-day Moving Average on September 01, 2020 date and that indicates a change from an upward trend to a downward trend.

The 10-day Moving Average for T crossed bearishly below the 50-day moving average on September 04, 2020. This indicates that the trend has shifted lower and could be considered a sell signal. In 11 of 19 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 58%.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 45%.

The Aroon Indicator for T entered a downward trend on October 05, 2020. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 77%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.39.

The Tickeron Valuation Rating of 11 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.16) is normal, around the industry mean (1.51). P/E Ratio (17.51) is within average values for comparable stocks, (672.62). Projected Growth (PEG Ratio) (0.00) is also within normal values, averaging (76.04). Dividend Yield (5.25) settles around the average of (2.99) among similar stocks. P/S Ratio (1.24) is also within normal values, averaging (1.88).

The Tickeron PE Growth Rating for this company is 58 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is 61 (best 1 - 100 worst), indicating steady price growth. T’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is 67 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. T’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 79, placing this stock better than average.

The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.

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