Market Overview

AT&T's 2018 Potential Makes Near-Term Weakness Worth It

AT&T's 2018 Potential Makes Near-Term Weakness Worth It

Despite shares of AT&T Inc. (NYSE: T) hitting a new 52-week low of $33.81 Wednesday morning, analysts at Baird aren't ready to throw in the towel. The firm's William Power maintains an Outperform rating on AT&T's stock with a price target lowered from $43 to $42.

AT&T's revenue for the third quarter of $39.7 billion was in-line with what the analyst expected, while the headline EPS of 74 cents was good for a 2-cent beat -- although it would have been in-line excluding an income benefit. Aside from the headline numbers, investors were likely concerned the entertainment segment where margins fell from 23.5 percent a year ago to 21.3 percent. However, the margin decline "shouldn't have been a significant surprise" although it is "frustrating."

Meanwhile, wireless margins continue to remain "steady" and the merger with Time Warner Inc (NYSE: TWX) is on track to close, the analyst said. Coupled with the potential for tax reform from the White House and an attractive dividend yield, the stock may not seem as troubled as some suggest.

The move to the downside in AT&T's stock on Wednesday may have come as a surprise to the analyst. While sentiment surrounding the stock remains "abysmal," the stock should have seen at the very least a "modest" relief rally.

Bottom line, despite some "near-term pain" in AT&T's stock, multiple initiatives ahead should support the stock in 2018 and beyond.

Related Links:

AT&T's Worst Trading Day In Years, Explained

What Would A T-Mobile-Sprint, All-Stock Merger Look Like, And Is It Likely?

Image credit: Mike Mozart, Flickr

Latest Ratings for T

Oct 2019Initiates Coverage OnMarket Perform
Oct 2019ReiteratesOutperform
Sep 2019DowngradesBuyHold

View More Analyst Ratings for T
View the Latest Analyst Ratings

Posted-In: Baird telecom stocks telecommunication William PowerAnalyst Color Price Target Analyst Ratings Best of Benzinga


Related Articles (T + TWX)

View Comments and Join the Discussion!

Latest Ratings

YEXTMorgan StanleyMaintains15.0
WKMorgan StanleyMaintains42.0
RAMPMorgan StanleyMaintains58.0
PDMorgan StanleyMaintains34.0
HTHTDaiwa CapitalDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Brent Oil Forecast: Bullish Break, Eyes $60 Levels

5 Reasons The Prognosis For Acadia Healthcare Just Got Worse