Do AT&T’s Big Plans Support a Move to the Upside in the Stock?

With shares of AT&T (NYSE:T) trading around $34, is T an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

AT&T is a provider of telecommunications services in the United States and worldwide. Services offered include wireless communications, local exchange services, and long-distance services. AT&T operates in four segments: Wireless, Wireline, Advertising Solutions, and Other. The communications products offered through AT&T’s segments reach audiences using just about every widely adopted medium: Internet, voice, television, and mobile. As consumers continue to adopt this technology, providers like AT&T stand to see rising profits.

AT&T recently unveiled some big plans to expand its LTE network. During a Tuesday morning conference heard by TechHive, CEO Randall Stephenson said AT&T’s network will eliminate copper phone lines completely by 2020 in order to switch entirely to LTE, IP, and cloud computing. AT&T is also developing a service called LTE Broadcast that will help deliver specific content to certain areas and ease traffic on its LTE network.

T = Technicals on the Stock Chart Are Mixed

AT&T stock has been range-bound over the past couple of years. The stock is currently trading near the lower end of its two-year range. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, AT&T is trading below its key averages, which signals neutral price action in the near term.


Source: Thinkorswim