AT&T Stock Gears Up for Q2 Earnings: Bullish Signals Emerge Despite Bearish Trend
AT&T Inc. (T) is set to report its second-quarter earnings on Wednesday, with Wall Street analysts expecting 57 cents in earnings per share and $30 billion in revenue. While the stock has exhibited a moderately bearish trend in recent weeks, several technical indicators point to potential upside, making the upcoming earnings report a crucial catalyst for the telecom giant.
Key Takeaways:
- Bearish Trend: AT&T’s stock price is currently trading below key moving averages, hinting at bearish sentiment.
- Buying Pressure: Despite the bearish trend, the stock is trading above the 50-day and 200-day simple moving averages, suggesting potential upward momentum.
- Bullish Indicators: The MACD indicator is positive, the RSI suggests the stock is nearing oversold territory, and the Bollinger Bands indicate a favorable buying range.
- Analyst Optimism: Wall Street analysts maintain a "Buy" rating on AT&T stock with an average price target of $21, indicating a potential 13.09% upside from current levels.
A Closer Look at the Technical Landscape
While the stock is currently trading below the 8-day and 20-day simple moving averages, the fact that it is holding above the 50-day and 200-day SMAs is significant. This technical pattern suggests that, despite the recent downward pressure, there is a foundation of support for the stock.
The Moving Average Convergence Divergence (MACD) indicator currently sits at 0.18, which is considered a bullish signal. This indicates that the stock’s momentum is picking up, potentially leading to a price increase.
The Relative Strength Index (RSI), which measures the magnitude of recent price changes, is at 49.23. This suggests that AT&T’s stock is approaching oversold territory, meaning it could be ripe for a rebound. A RSI below 30 generally indicates an oversold condition, and a reading above 70 suggests an overbought condition.
The Bollinger Bands (25) are a technical analysis tool that measures the volatility of a security. They are currently at $18.00 to $19.37. The fact that AT&T’s stock price is within these bands suggests that it is trading within a range where buying pressure could be more prevalent.
Analyst Expectations and Price Action
AT&T shares closed the trading day on Monday at $18.55, down 2.98%. However, the consensus analyst rating on AT&T remains a "Buy," with a price target of $21.98, indicating significant upside potential.
Scotiabank, RBC Capital, and Goldman Sachs have recently issued ratings on AT&T, with an average price target of $21, implying a 13.09% upside from current levels. These price targets reflect a strong belief in AT&T’s future performance, particularly with the company’s focus on expanding its fiber network and growing its wireless business.
What to Watch For in the Q2 Earnings Report
The upcoming earnings report will be closely watched by investors to gauge AT&T’s performance in the second quarter. Key areas to focus on include:
- Revenue Growth: Analysts expect a slight increase in revenue, driven by continued growth in the wireless and fiber businesses.
- Subscriber Growth: Investors will want to see strong growth in the number of both wireless and fiber subscribers, demonstrating the company’s ability to attract new customers and retain existing ones.
- Operating Expenses: AT&T is working to reduce its debt and operating expenses, which will be closely monitored.
- Capital Expenditures: The company is investing heavily in its fiber network, and investors will want to see that capital expenditures remain aligned with its strategic objectives.
Overall, while there’s a degree of uncertainty in the market, the technical indicators and analysts’ expectations suggest that AT&T stock is poised for potential upside growth. The upcoming earnings report will be a crucial data point that could either confirm or debunk these optimistic predictions.
