Telecom Titans AT&T and Verizon Report Earnings

Telecom titans At&T (Ticker Symbol: T) and Verizon (Ticker Symbol: VZ) reported earnings earlier this week.  AT&T released its quarterly earnings report on Wednesday announcing earnings per share of .86 cents, right in line with Wall Street analysts’ expectations. Revenue came in at $44.83 billion which was short of Wall Street analysts expectations of $45.11 billion.  AT&T announced that it lost 540,000 DirecTV subscribers vs. the 322,000 that Wall Street analysts were projecting.  That was a very big miss for the company and AT&T’s stock is down over 5% since reporting on Wednesday.

AT&T’s stock price had a rough year in 2018.  After failing to make new highs in the first quarter, the stock proceeded to sell off lower, trading below its 100 and 200-Day Moving Averages. The downtrend persisted through the next two quarters led by weak earnings and revenue releases.   In the fourth quarter of that same year, AT&T found a temporary bottom while forming a bullish divergence indicated by the purple circles on the chart. (Lower low in price, and a higher high in the Relative Strength Index) AT&T started off 2019 positively, although underperforming the overall market.  After Wednesday’s release, the stock has traded lower, finding some minor support just around its 100-Day Moving Average.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 11 analysts offering 12-month price targets, the average price target for AT&T’s stock is $35.67.  According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $30.34.

Verizon released it’s earnings on Tuesday, reporting earnings per share of $1.22 vs. Wall Street consensus of $1.17. Revenue came in line with analyst expectations at $32.1 billion.  The telecom giant reported over 60,000 net additions to its postpaid retail wireless business which was the second lowest number since 2015.  Verizon is down just over 4% since the earnings release on Tuesday.

Verizon had a rough start to 2018, spending the first two quarters of the year in negative territory. The stock found some support just above the $46.00 price level while forming a rounded bottom basing pattern.  In July of 2018, Verizon’s stock took off to the races, breaking above its downtrend from its yearly highs and crossing above the 100 and 200-day Moving Averages. The stock continued to rally gaining 33%, propelled by two strong earnings and revenue beats in the third and fourth quarters.  In December of 2018, Verizon’s Stock had a slight setback, pulling back over 50% to close out the year.

In 2019, Verizon started out the year negative, finding some support at the 200-day Moving Average and forming a Double Bottom reversal pattern.  After another positive report, Verizon bounced higher breaking above its 2019 downtrend. After the current set back from its earnings release on Tuesday, the stock is currently trading just above its  200-day Moving Average.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 10 analysts offering 12-month price targets, the average price target for Verizon’s stock is $61.86.  According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $55.87.

The telecom sector has had a rough start to 2019.  AT&T and Verizon posted decent earnings per share numbers but it seems as if the institutions are pushing both stocks lower. Telecom investors should look for Sprint’s earnings on May 1st for more news within the sector.

 

 


Wealth365, Inc. wants to ensure you understand that trading and investments have large potential rewards, but also large potential risk. Wealth365 contributors and staff writers may have previously had, currently have, or plan to add securities they write about as a part of their trading or investment portfolio. Trading and investment strategies mentioned in Wealth365 videos or articles may not be suitable for you and you should make your own independent decision regarding them.This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You should strongly consider seeking advice from your own investment advisor. Review our full terms of use and additional risk disclosures here.