AT&T (T) is one of the most searched stocks on Zacks.com. Its stock, known as the t stock, has gone up by 17.6% in the past month. In the same time, the Zacks S&P 500 composite went up only 2.6%, and the Wireless National industry rose 15.8%. Now, many people ask: Where is the t stock headed next?
Revisions to Earnings Estimates
At Zacks, we look at how experts change their guesses of a company’s future earnings. These guesses help us know the fair value of the stock. When experts raise their earnings guesses, the stock’s fair value goes up, and more people want to buy it. Studies show that changes in these guesses can affect the stock price in the short term.
For the current quarter, AT&T is expected to earn 52 cents per share. This is 5.5% lower than what it earned a year ago. Over the last 30 days, this guess has grown by 3.8%. For the whole current fiscal year, the consensus guess is $2.14 per share, a change of -5.3% compared to last year, and it went up by 0.5% in the past month. For the next fiscal year, the guess is $2.27 per share, which is 6.1% higher than a year ago, even though it dropped by 0.1% in the last month.
Because of these changes, AT&T is given a Zacks Rank of #3. This rank means that the t stock is expected to do much like the overall market.
Revenue Growth Forecast
A company needs to grow its sales to grow its earnings. For AT&T, the sales estimate for the current quarter is $30.55 billion. This is 1.8% more than what it made last year. For the current fiscal year, the estimate is $124.19 billion, a 1.5% increase. For the next fiscal year, the estimate is $125.92 billion, which is 1.4% higher than last year’s sales.
Last Reported Results and Surprise History
In the last quarter, AT&T reported revenues of $32.3 billion. This is 0.9% higher than the same quarter last year. The earnings per share (EPS) were 54 cents, which is the same as last year. The reported revenues were almost the same as the guess of $32.29 billion, with a small surprise of +0.03%. The EPS surprise was much higher at +12.5%. In the past four quarters, AT&T beat the earnings guesses three times and beat the revenue guess once.
Valuation
It is very important to know if a stock is priced right. We look at numbers like price-to-earnings, price-to-sales, and price-to-cash flow. Zacks uses a tool called the Value Style Score. This tool gives stocks a grade from A to F. AT&T is given a grade B. This shows that the t stock is selling at a discount compared to its peers.
Bottom Line
All this information helps us decide if we should pay attention to the t stock. Although there is a lot of buzz, AT&T’s Zacks Rank of #3 suggests that its price may move in line with the market soon.