Should I invest in AT&T shares in February?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Feb 12, 2021
  • AT&T has raised its 2021 outlook and expects about 1% consolidated revenue growth
  • Total revenue has decreased below the expectations in Q4
  • If the price jumps above the $30 resistance, the next target could be around $32 or even $35

AT&T (NYSE: T ) stock offers a very good opportunity for long-term investors, but its price is still not able to stabilize above the $30 level.

Fundamental Analysis: AT&T has raised its 2021 outlook

AT&T Inc. provides telecommunication, media, and technology services worldwide, the company is handling the coronavirus threat very well, and the current dividend makes it one of the steadier players in the region. The company’s recent earnings and its overall budget have continued to perform above the analyst’s expectations, and AT&T has plenty of room to continue to offer dividend hikes.

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AT&T reported Q4 results in the last week of January; total revenue has decreased only -2.4% Y/Y to $45.7B while Q4 Non-GAAP EPS was $0.75 (beats by $0.02). Total revenue has decreased below the expectations (beats by $1.21B) while a free cash flow was $7.7B vs. a consensus of $6.4B.

Mobility revenue rose 8% while HBO Max topped 41 million domestic subscribers and neared 61 million worldwide. The company’s EBITDA is above $53B, and AT&T continued to add subscribers during the last year, and as fierce as the competition was, it kept the churn rate low.

“By investing in our high-quality wireless customer base, we had our best full-year of postpaid phone net adds in a decade and our second lowest postpaid phone churn ever. Our fiber broadband net adds passed the 1 million mark for the year. And the release of Wonder Woman 1984 helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast,” said CEO John Stankey.

AT&T has raised its 2021 outlook, and according to estimates, the company expects about 1% consolidated revenue growth. With the stability of a 7.25% dividend yield, AT&T has a very good risk/reward ratio currently, and investors in this stock stand to gain a lot more for taking a comparatively smaller risk.

If we compare the total stockholders’ equity of $179B and the market capitalization of $204B, we can notice that AT&T is not expensive and now could be a good moment to invest in shares of this company.

Technical Analysis: $30 represents a very strong resistance level

Data source: tradingview.com

The current supports levels are $27 and $25, $30, $32, and $35, represent important resistance levels. If the price jumps above the $30 resistance, it would be a signal to trade AT&T shares, and the next price target could be around $32.

If the price falls in the upcoming period, every price in a range from $23- $26 could be a very good opportunity to invest in AT&T shares.

Summary

AT&T reported Q4 results in the last week of January; total revenue has decreased only -2.4%, and the company continues to add subscribers. AT&T has raised its 2021 outlook, and according to estimates, the company expects about 1% consolidated revenue growth. AT&T shares have a good risk/reward ratio, and if the price jumps above the $30 resistance, the next target could be around $32 or even $35.

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