AT&T stock price forecast: I wouldn’t touch with a ten-foot pole

AT&T (NYSE: T) stock price has been in a freefall as concerns about the company’s future remain. It retreated to a low of $13.50 on Monday, the lowest point since the early 1990s. In all, T shares have dropped by over 42% from its all-time high.

A major destroyer of value

AT&T has become one of the biggest destroyers of value in corporate America. For example, the American GDP has increased from over $16 trillion in 2013 to over $26 trillion in 2023. AT&T’s annual revenue dropped from over $128 billion in 2013 to $120 billion in 2022. 

The biggest value destroyer was the acquisition of over $85 billion. It then dumped the company by bundling it with Discovery. Today, Warner Bros. Discovery has a market cap of less than $30 billion.

Further, AT&T acquired DirecTV in 2015 for over $67 billion. It then exited the company by spinning it off in a deal valued over $16 billion. This means that the company has lost billions of dollars in the past decade. 

These acquisitions have left a highly-indebted company. Its total long-term debt stands at over $127 billion. AT&T has consistently stood as one of the most indebted companies in the world. 

AT&T has done little to change this trajectory. For example, it is led by John Stankey who became the CEO in 2020. Before that, Stankey was the CIO of the company, the CEO of Warner Media, and the Chief Operating Officer of AT&T.

AT&T has performed badly under Stankey. Its revenue growth has stalled while the company has consistently shed the number of subscribers. In a recent statement, the company’s CFO warned that the number of new phone customers growing by 300k, lower than the expected 476k. The company also slashed its dividend in 2022.

What next for AT&T stock price?

AT&T share price faces an uphill battle as long-term holders exit and as subscriber growth deteriorates. The company is now focusing with cost cuts, which executives hope will push its free cash flow to $16 billion. As always, words by AT&T’s executives should always be taken with a grain of salt. Also, there are concerns about a WSJ investigation on lead cables.

Turning to the daily chart, we see that the stock dropped below the important support at $13.85 this week. This was an important level since it was the lowest level in October last year. It was also the lower side of the inverted cup and handle pattern. Therefore, the outlook of the AT&T stock price is bearish, with the next level to watch will be at $10. As such, I can’t recommend buying AT&T stock.