AT&T stock price forecast for Q4 after tapping into Ericsson's 5G network expertise

On Monday, AT&T Inc. (NYSE:T) shares edged lower 2.60% after announcing a deal with Ericsson that will help the US telecommunications company accelerate its 5G plans. The company is tapping into the Swedish telecommunications company’s next-generation centralized RAN architecture.

The technology is enabled by Fronthaul Gateway and has the ability to support future network enhancements, like the evolution to Cloud RAN. As a result, AT&T will be able to deploy the C-Band spectrum acquired earlier this year and launch a nationwide 5G network.

The 5-year deal will help AT&T accelerate its 5G Standalone project, covering 70-75 million people with 5G over C-Band by the end of 2022.

AT&T shares are down more than 20% since 10th May and 11.46% this year. As a result, the company is significantly underperforming the S&P 500 Index, which is up by 18.36% year-to-date.

Could it be time to buy?

AT&T shares have plunged substantially this year, pushing its forward P/E ratio lower to just 8.37. As a result, value investors could find the stock as a compelling option for their portfolios.

However, looking at the company’s growth prospects, it may not be a wise decision. Analysts estimate AT&T’s earnings per share to plummet by 139.60% this year before rising at an average annual rate of 2.70% over the next five years.

In comparison, T’s EPS fell at an average yearly rate of 18.30% in the previous five. Therefore, growth investors could have a case for choosing to buy the stock amid the recent price declines.

Is a rebound imminent?

Technically, AT&T shares appear to have recently plunged to trade just above the trendline support in a descending channel formation. As a result, the stock price has moved closer to the oversold conditions of the 14-day RSI, creating a perfect opportunity for a rebound.

Therefore, investors could target potential rebounds at $26.74, or higher at $27.64, while $25.35 is a crucial support zone.

It could be time to buy

In summary, although AT&T earnings could plunge significantly this year, the stock trades at an attractive forward P/E whilst also offering a better five-year growth compared to the previous five years.

Therefore, with shares closer to oversold conditions, it could be time to buy the stock.