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AT&T share price forecast: Positive earnings results boost the T stock amid company legal penalties

By Rob Griffin

Edited by Vanessa Kintu


Updated

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T
AT&T
19.83 USD
-0.42 -2.080%

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AT&T (T) stock forecast: What’s next after WBD spin-off. Sign outside AT&T Mobility office in Central Florida Research Park in Orlando, Florida, USA, a subsidiary of AT&T Inc. provides wireless services.
AT&T (T) stock forecast: What’s next after WBD spin-off Photo: JHVEPhoto / Shutterstock.com

Investors in AT&T (T), the US telecoms company, have endured a challenging year with an extremely volatile stock price. Are brighter days ahead?

The uncertain macroeconomic backdrop and market hostility towards the telecommunications sector have been among the negative factors. However, a decent set of third quarter results and optimistic forward-looking predictions have seen the T stock price recover in recent weeks.

AT&T live chart

The question is what happens now? In this T stock forecast, we look at the company’s recent results, news affecting the stock price and the AT&T stock predictions of analysts.

What is AT&T

AT&T is a US-based multinational telecommunications company that’s involved in wireless, 5G technology, broadband internet and fibre. Its products and services are used to connect businesses of all sizes across various industries, as well as transform how local and international markets communicate.

The company’s operations include AT&T Fiber, which reaches 18.5 million customers in the US, and FirstNet, America’s only purpose-built public safety network. The company has stated

“Customers want great connectivity and they want it coupled with better value and service. Our goal is to give them multiple reasons to engage with us every day.”

According to Morningstar, the wireless business contributes about two thirds of AT&T’s revenue, following the spinoff of WarnerMedia:

“The firm is the third-largest US wireless carrier, connecting 69 million postpaid and 18 million prepaid phone customers,” it stated. “Fixed-line enterprise services, which account for about 20% of revenue, include internet access, private networking, security, voice, and wholesale network capacity.”

AT&T also has a sizable presence in Mexico, serving 21 million customers. That business accounts for 2% of revenue.

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Stock price analysis

AT&T (T) 5-year historical performanceAny AT&T stock forecast has to consider what’s happened to the price over the past year – 2022 has been pretty volatile.

The T stock price has slipped a modest 0.57% during 2022. The stock was trading at $19.21 in early January and stood at $19.17 as the market closed on 6 December.

However, the price has been as high as $21.29 and as low as $14.63 this year. The all-time high stock closing price, meanwhile, was $24.63 on 18 November 2019.

The stock rose 15% in October on the back of relatively positive third quarter earnings results, then enjoyed a further lift in December following chief operating officer Jeff McElfresh’s comments at an industry conference.

The company, which is based in Dallas, Texas, listed on the New York Stock Exchange (NYSE) in 1901 and trades under the ticker ‘T’.

In October 2021, several AT&T employees rang the opening bell in recognition of the 120th anniversary of its original listing.

Latest earnings

A key point of our AT&T share price forecast is examining the company’s recent financial results – Q3 results were published on 21 October. They showed consolidated revenues of $39.9bn, down 5.7% from $42.3bn in the same quarter last year. This reflected the separation of the US video business, other businesses and lower business wireline revenues.

Cash from operating activities was $9.9bn, down $2.3bn year-over-year (YOY), with capital expenditures of $4.7bn and content spend at $4.8bn.

News driving the share price

Jeff McElfresh, AT&T’s chief operating officer, told the UBS Global TMT Conference on 6 December 2022 that the company was seeing healthy customer growth in 5G and fibre. Adding that AT&T remained committed to its guidance of achieving 30 million-plus locations, including business locations, with fibre by the end of 2025.

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At the end of Q3 2022, AT&T had the ability to serve 18.5 million consumer locations and approximately three million business customer locations.

McElfresh also indicated that AT&T expected full-year capital investment in the $24bn range to meet growing demand for core connectivity, while also meeting full year 2022 guidance for free cash flow in the $14bn range.

More broadly, he told the conference that the company remained focused on investing in building a sustainable and durable connectivity operation with improved cash generation.

Payment penalty

Separately, AT&T agreed to pay a record penalty of $6.25m to the US Securities and Exchange Commission (SEC) to settle a lawsuit over leaks to Wall Street research analysts.

Additionally, three company executives have agreed to pay $25,000 each in connection with the charges brought in March 2021. The complaint alleged that AT&T investor relations executives Christopher Womack, Michael Black and Kent Evans made “private, one-on-one phone calls” to analysts at about 20 firms. It’s claimed these were made to avoid falling short of consensus revenue expectations for the third consecutive quarter.

“On these calls, the AT&T executives allegedly disclosed AT&T’s internal smartphone sales data and the impact of that data on internal revenue metrics,” noted the SEC, pointing out that such information was prohibited from selective disclosure under Regulation FD. 

AT&T stock forecast: Where will the price go next?

So, what are analysts’ AT&T stock predictions?

As of 8 December T stock was a ‘moderate buy’, based on the views of 13 analysts compiled by TipRanks. Six had ‘buy’ recommendations in place, while seven saw it as a ‘hold’. Their consensus AT&T stock forecast 2023 was for T to reach $20.20, which would represent a 5.37% upside over the $19.17 price as the market closed on 6 December 2022. The highest T stock forecast was $24 and the lowest $17.

According to the algorithmic forecasts of Wallet Investor, AT&T is a “bad long-term (one year) investment”. The forecaster predicted the stock could fall to $13.91 over the next 12 months. 

Its AT&T stock forecast 2025 has T stock down to just $4 by December 2025.

Analysts’ comments and predictions

Michael Hodel, director at Morningstar, had a $25 fair value estimate on the stock, according to his AT&T stock forecast published on 16 November. He pointed out sentiment around the US wireless industry had turned negative recently, partly because analysts fear carriers will spend “egregiously” on networks.

“Second, in an extremely mature market, these firms will beat each other up seeking whatever growth remains, punishing revenue and margins,” he wrote. “As such, balance sheets will continually need repair and cash available for shareholders will be increasingly limited.” However, he believed this outlook is wrong:

“Following a series of spectrum auctions, AT&T and Verizon have acquired a trove of spectrum that should allow both firms to close the network speed and capacity gap that T-Mobile has opened recently.”

Hodel added that returns on capital could remain acceptable for both firms, even with the huge increase in sums invested following the auctions:

“Going forward, we expect driving returns comfortably above the cost of capital will be the carriers' highest priority.”

When looking for AT&T stock forecasts, it’s important to bear in mind that analysts’ forecasts can be wrong. Analysts’ T projections are based on making a fundamental and technical study of the stock’s performance, but past performance is no guarantee of future results.

It’s important to do your own research and remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your portfolio and how comfortable you feel about losing money. You should never trade more than you can afford to lose.

FAQs

Is AT&T a good stock to buy?

Whether AT&T is a good stock for you to buy depends on various factors. These include your existing portfolio, investment goals, and attitude to risk. You’ll also need to carry out your own research into the company to see if it’s attractive. Remember to never invest more money than you can afford to lose.

Will AT&T stock go up or down?

It’s impossible to say for definite. The consensus view of analysts, compiled by TipRanks, is the stock could hit $20.20 – 5.37% higher than the $19.17 closing price on 6 December 2022. The highest forecast was $24 and the lowest was $17. However, these predictions can be wrong. 

Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before trading. And never invest or trade money you cannot afford to lose.

Should I invest in AT&T stock?

Whether or not you invest in AT&T stock depends on your attitude to risk and opinion of the stock, including its longer term prospects, among other factors. We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion. Remember to only invest what you can’t afford to lose.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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