Selling AT&T as it faces revenue and profit growth challenges

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AT&T Inc (NYSE:T) is hot. The stock is trading at $20.98. The 52-week high is $22.15, while the low is $16.62. Investors are interested in whether the stock could rebound strongly.

There are several notable facts about AT&T. The company appears to be underperforming in the wireless telecommunications industry. The company’s revenues are down. Investors took notice when the company announced it was focusing on growing average revenue per user.

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The ROE is low at 10.37%, while the ROA is only 3.09%. EPS is projected at $2.39, down from $2.77 a year earlier. The PE of the company is 8.87. Despite declining earnings, the company has a high dividend yield of 5.34%.

This analysis considers that the decline in revenue and EPS remains a concern for the company. Unless AT&T demonstrates a strong growth strategy, the dividend yield will be unsustainable. Investors are therefore warned.

AT&T may face resistance at $22

Source – TradingView

AT&T faces resistance at $22. The RSI of 58.68 is among the highest in the current market. While the MACD shows the stock to be bullish, we believe it is unlikely to break above $22. This means that the price of $20.95 is already near the top and could pull back. This makes AT&T a sell at current highs.

Summary

AT&T has an attractive dividend yield of 5.34%. However, the price at $20.95 is near the $22 52-week high and is unlikely to break above resistance. AT&T is selling as revenue and EPS decline.

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