AT&T (T) appears to be treading in the middle of the road and investors could be better off if they trade with caution.
AT&T (NYSE: T) stock price has staged a strong comeback in the past few months, making it one of the best telecom companies in the US. It bottomed at $12.75 in July last year to almost $20 today.
I have been bullish and invested in AT&T since late December last year. The run-up in T's price introduces a concern about exhausted upside. Looking at the fundamentals, I see a clear case for remaining bullish.
T stock may have reached an inflection point with improving cash flow and strengthening market position. The current competitive landscape shows stabilization and improvement in market share for T with its cost-effective plans and reliable network. Despite some risks, T stock remains a deep-value play with a compressed valuation, high dividend yield, and improving fundamentals.
AT&T offers an ultra-high dividend yield at recent prices. The telecom giant slashed its dividend payout in 2022 to account for the spinoff of its media assets.
AT&T has had a phenomenal last 12 months, handily beating the S&P 500's performance on a total return basis. The company has worked diligently to reduce its debt burden, with more to come in the future. Despite a strong 12 months, the stock remains relatively inexpensive on a forward earnings basis.
Warner Bros. Discovery, which was formed in 2022 from the merger of AT&T's WarnerMedia and Discovery Communications, has agreed to pay $125 million to settle a shareholder lawsuit over the deal.
AT&T's free cash flow is close to double its dividend obligation. The telecom giant knocked $6 billion off its debt in the past four quarters.
The wireless telecom sector is heating up.
AT&T Inc T soared to a new 52-week high of $19.32 during day trading on July 1, showcasing a robust upward trajectory.
AT&T's failed media ambitions set the company back. Its financials have dramatically improved in recent years.
Goldman Sachs analyst James Schneider, Ph. D., initiated coverage on the U.S. Telecom Services and infrastructure sector (14 companies) and is most constructive on wireless carriers and data centers.