Sell AT&T as it faces challenges in growing revenues and earnings

AT&T Inc (NYSE:T) has been trending. The stock is trading at $20.98. The 52-week high is $22.15, while the low is $16.62. Investors are interested in knowing whether the stock could rebound strongly.

There are several notable facts about AT&T. The company appears to underperform in the wireless telecommunications industry. The company’s revenues have been declining. Investors took note when the company announced a focus on growing the average revenues per user. 

The ROE is low at 10.37%, while the ROA is only 3.09%. The EPS is projected at $2.39, which would decline from the previous year’s $2.77. The PE of the company is 8.87. Despite the declining earnings, the company has a high dividend yield of 5.34%.

This analysis considers that the revenues and EPS decline remains a concern for the company. Unless AT&T demonstrates a solid strategy for growth, the dividend yield will be unsustainable. Investors are therefore cautioned.

AT&T may face resistance at $22

AT&T faces resistance at $22. The RSI of 58.68 is among the highest in the current market. While the MACD shows that the stock is bullish, we think it is unlikely to rise above $22. This means that the price of $20.95 is already close to the peak and may pull back. That makes AT&T a sell at the current highs.

Summary

AT&T has an attractive dividend yield of 5.34%. However, the price at $20.95 is near the 52-week high of $22 and is unlikely to rise above the resistance. AT&T is a sell as revenues and EPS decline.