On Monday, AT&T Inc. (NYSE:T) shares edged lower 2.60% after announcing a deal with Ericsson that will help the US telecommunications company accelerate its 5G plans. The company is tapping into the Swedish telecommunications company’s next-generation centralized RAN architecture.
The technology is enabled by Fronthaul Gateway and has the ability to support future network enhancements, like the evolution to Cloud RAN. As a result, AT&T will be able to deploy the C-Band spectrum acquired earlier this year and launch a nationwide 5G network.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
The 5-year deal will help AT&T accelerate its 5G Standalone project, covering 70-75 million people with 5G over C-Band by the end of 2022.
AT&T shares are down more than 20% since 10th May and 11.46% this year. As a result, the company is significantly underperforming the S&P 500 Index, which is up by 18.36% year-to-date.
Could it be time to buy?
AT&T shares have plunged substantially this year, pushing its forward P/E ratio lower to just 8.37. As a result, value investors could find the stock as a compelling option for their portfolios.
However, looking at the company’s growth prospects, it may not be a wise decision. Analysts estimate AT&T’s earnings per share to plummet by 139.60% this year before rising at an average annual rate of 2.70% over the next five years.
In comparison, T’s EPS fell at an average yearly rate of 18.30% in the previous five. Therefore, growth investors could have a case for choosing to buy the stock amid the recent price declines.
Is a rebound imminent?
Technically, AT&T shares appear to have recently plunged to trade just above the trendline support in a descending channel formation. As a result, the stock price has moved closer to the oversold conditions of the 14-day RSI, creating a perfect opportunity for a rebound.
Therefore, investors could target potential rebounds at $26.74, or higher at $27.64, while $25.35 is a crucial support zone.
It could be time to buy
In summary, although AT&T earnings could plunge significantly this year, the stock trades at an attractive forward P/E whilst also offering a better five-year growth compared to the previous five years.
Therefore, with shares closer to oversold conditions, it could be time to buy the stock.
Where to buy right now
To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use:
- Etoro, trusted by over 13m users worldwide. Register here >
- Capital.com, simple, easy to use and regulated. Register here >
Source link
