Today was an out-and-out disaster for AT&T (NYSE:T). Not because it lost just under 4% at one point in Friday afternoon’s trading—which would have been bad enough—but because of what that latest loss represented. The latest losses AT&T saw today brought the stock to lows that haven’t been seen in the last 29 years, and it’s largely thanks to analyst pivot and some frightening new cost reports.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
The first blow came when Philip Cusack, analyst with JPMorgan, cut AT&T’s rating from “overweight” to “neutral.” The reason? Competition, mostly. There’s increasing pressure in mobility from the various rival firms as well as comparative newcomers to the market, there’s trouble in the consumer market, and even the business market isn’t shaping up that great. Growth will still be seen for a while, Cusack notes, but the growth rates will slow beyond what’s already been seen.
The second blow, meanwhile, came after new cost information emerged for cleaning up its lead-coated wiring. AT&T has been around for a long time; it’s easy to forget that. So it’s also easy to forget that AT&T likely used a lot of lead in its cable rollouts, since it was what was available at the time. The exact amount AT&T faces in addressing its lead problem isn’t known yet, but AT&T’s network accounts for about 40% of homes in the United States alone plus a long-distance network that extends substantially. However, some of this cost should be addressed by the United States government itself, as AT&T’s predecessor, the Bell System, was mandated to extend broadly to connect the U.S in the first place.
Regardless of how that ultimately works out, analysts are on the fence about AT&T. Seven Buy ratings and seven Hold make AT&T stock a Moderate Buy. Those who get in will find impressive potential waiting; AT&T stock offers investors a 48.43% upside potential.
