Should I buy AT&T shares in December 2021?
AT&T Inc. (NYSE: T) shares have weakened more than 7% since the beginning of December and continue to trade near their lowest point since the global financial crisis, more than a decade ago.
Jeff McElfresh raised new concernsCopy link to section
AT&T Inc. provides telecommunication, media, and technology services worldwide. AT&T is s the second largest provider of mobile telephone services and the largest provider of fixed telephone services in the United States.
AT&T shares continue to trade near their lowest point since the global financial crisis after communications chief Jeff McElfresh raised new concerns about user growth in the wireless industry.
Over the last five financial quarters, AT&T has achieved its best subscriber results in a decade (almost 4 million postpaid phone net additions and 1.4 million fiber net adds).
Speaking at a Wells Fargo conference in the last week of November, Jeff McElfresh said that the outlook for 2022 and beyond would not be so good. Jeff McElfresh added:
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There’s no doubt that the stimulus programs have put some extra cash in household budgets this year. In a three-player market with the integration between Sprint and T-Mobile, we suspect the activity level for postpaid in 2022 is probably going to subside.
On the other side, AT&T expects higher service revenues from the growing base, while CFO Pascal Desroches said last week that the industry is performing better than it ever has before, and there will be a lot of opportunity for AT&T.
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The company is growing revenues, subscribers, and profits, and CFO Pascal Desroches expects this trend will continue in the upcoming quarters.
AT&T has a very good risk/reward ratio; the current dividend yield is above 9%, and investors in this stock stand to gain a lot more for taking a comparatively smaller risk.
AT&T trades at less than four times TTM EBITDA, and now could be a good moment to invest in shares of this company.
Technical analysisCopy link to section
AT&T shares are currently down more than 30% from their 2021 highs, and the risk of further decline is still not over.
AT&T shares remain in a bear market, and if the price falls below $22 support, the next price target could be around $20.
The strong resistance level stands at $26, and if the price jumps above this level, it would be a “buy” signal, and we have the open way to the $28.
SummaryCopy link to section
AT&T shares continue to trade near their lowest point since the global financial crisis after communications chief Jeff McElfresh raised new concerns about user growth in the wireless industry. AT&T shares are currently down more than 30% from their 2021 highs, but fundamentally looking, investors in this company stand to gain a lot more for taking a comparatively smaller risk.