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AT&T: The Market Is So Wrong Here

May 11, 2023 12:00 PM ETAT&T Inc. (T)T.PR.A, T.PR.C, TBB, TBC58 Comments


  • AT&T Inc. stock experienced a selloff in recent weeks and currently trades close to its 6-month low.
  • Despite reporting decent results for Q1, the market didn’t like the fact that AT&T generated minimal free cash flow during the quarter.
  • The good news, though, is that there are reasons to believe that AT&T should be able to exceed expectations in the following quarters.
  • If that’s the case, then there’s a possibility that AT&T stock would recover and create additional shareholder value in the foreseeable future.
  • Looking for a helping hand in the market? Members of BlackSquare Capital get exclusive ideas and guidance to navigate any climate. Learn More »

AT&T Advises Its Over 200,000 Workforce To Work From Home, As Coronavirus Continues To Spread

Ronald Martinez

Despite reporting decent earnings results for Q1 and beating the street estimates a couple of weeks ago, AT&T Inc. (NYSE:T) stock nevertheless experienced a selloff and trades close to its 6-month low

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This article was written by

Bohdan Kucheriavyi profile picture
Bohdan Kucheriavyi is a Ukraine-based proprietary trader working at a prop firm. He has been successfully investing personally and professionally since 2015. He combines his knowledge of international relations with his passion for global markets to identify good investments based on momentum and special situations with a specific focus on tech companies. Bohdan leads the investing group Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (58)

Brent Ericson profile picture
how does this stock just keep going lower and lower everyday? Even in an up market?!
Michael Hooper profile picture
@Brent Ericson ATT is a loser dog stock. There is a flight to safety right now and that means solid stocks like consumer, defensive stocks, like PepsiCo, Coca-Cola, Hershey, these companies have great margins, and can raise prices and people will still buy their products. the pricing pressure in the cell phone world, and the streaming world is very intense and a ATT is, an amalgamation of many problems, too much debt, not enough revenue, terrible margins, a white elephant in the 5G build out. All of these just say no no no I’m gonna put my money somewhere else. Thus the stock Falls.
Does $T management ever read some of these comments? Just wondering why most of the comments here on Seeking Alpha knows a change in management and new strategic direction is needed but it seems like the current board and management of AT&T are blind about that and paying themselves 'FAT" bonuses and compensation for lack of growth and mismanagement of the company. My questions is what are $T shareholders doing about this issues?
@zionking12 T is essentially an unregulated utility. If you are looking for growth, it’s a bad place to be (see the WBD acquisition as a misguided attempt to. Relate growth).

But an undervalued utility with a 6% yield isn’t the worst place to put cash to work.
Thanks for your time and analysis. ATTs stock is clearly on a slow decline and has been for many years. It is, essentially, a sinking ship. Do yourself a favor and answer these questions truthfully. Are ATTs Cash Flows positive or negative? What’s the debt load of ATT? What are the growth opportunities for ATT? Over the recent past has ATT raised or cut its dividend and, if so, why? What about the long-term trend for the stock, is it up or down (what story does it tell)? Does ATT have a competitive advantage? In short, are the dividends safe? Having said that, would you be better off buying 5%+ treasuries/brokered CDs for your portfolio of which incidentally are guaranteed or buying a sinking ship such as ATT for its dividend?

Otherwise, keep up the good work. Gustave.
Good info, thank you. I bought at 17, so I’m not unhappy. I plan to add on dips.
whatsfordinner profile picture
Doesn't T have a tremendous amount of debt and when it reprices under this admin all the costs of funds go UP! That can't be helpful and even feeds inflation. Where is the inflation reduction act I've heard touted over and over by democrats.
Fangorn profile picture
@whatsfordinner Didnt he answer the above?

"AT&T was also able to strengthen its balance sheet as the long-term debt decreased from $132.9 billion in Q4’22 to $123.4 billion in Q1’23. On top of that, by having an interest coverage ratio of nearly 4x while 95% of its debt is at a fixed rate of 4.1%, the company will likely be able to continue to service its debt without any problems despite the rising rate environment"
whatsfordinner profile picture
@Fangorn As I recall I have read articles contraire.
@whatsfordinner Gas is down over a buck vs. last year! Inflation overall is coming down albeit moderately but consistently for the same time frame. Try reading the reports monthly!
I’ve owned T for going on 5 years now and it has done nothing but go down.
Et20 profile picture
I prefer non US carriers. Softbank, Telus, Orange, CHT etc.
Why would anybody by T when you can buy a pipeline stock with the same yield and without crippling debt, crippling management, and more than enough cash flow to support and grow the dividend?

Owning T is the equivalent of death by 1000 papercuts.
Mangement, management, management.
@Elon beat me with jumper cables T has had bad management for 20+ years, yet every election they get re-elected. They have been elected to dismantle T and ruin the company. How tough can it be to just take billions of dollars and sit on them for interest for 20 years? They can't do it! They feel like they have to do something to "add value" and screw it up by the numbers. I can't remember a good deal they have made in 20+years, yet we can't seem to get them fired.
I wonder if Black Rock is secretly running the show behind the scenes trying to make them "DEI" like Disney, Budweiser,XOM, and others? I own XOM and their board has them dedicated to being out of the oil business in 10 years. The board was forced to hire these idiots from an outside group. I think Black Rock now owns about 70% of the S&P.
jakeelwood5 profile picture
Is 5G making any money for any of these companies? I look at T as a bond substitute and utility going into a recession.
VoiceofSanitySometimes profile picture
Why would you risk your hard earned money to bet on bad management?

Put your money into well-run companies. No guarantees, but your odds are a lot better.
Ishi Kenjo profile picture
The market was wrong when T was at $30. $17 might be kind. If they could get rid of Stinky & the rat infested board things could improve. Until then a loser!
Michael Hooper profile picture
@Ishi Kenjo AT&T has been a loser company for a long time. I remember an earnings call many years ago. The earnings were no good but they bought a small company and touted that at the earnings Call and investors seemed to like it so the stock bumped up. The reality was cash flow was horrible. Debt was rising and earnings were not growing at all. But hey look, we got this new company! Bullshit.
Ekanova profile picture
The Market is always right.
Brent Ericson profile picture
just when you think things are getting better, all the gains are gone.
Code Talker Market Analysis profile picture
The market is pricing in a recession. This is what it should do. $T is not going to make extra FCF each quarter in a recession.
The market doesn't get it wrong. The market is the market and T missed its own free cash flow estimates and that disappointment is what dragged T down.
@Brucejfern not true. They are on target. Analysts over projected Qtr 1 FCF. I guess they were not paying attention in the 4th Qtr CC.
T has a perception problem magnified by its disastrous past mismanagement that intensifies every future mistake. Management never identified prior to the first quarter earnings announcements that FCF would miss and miss badly. It gives the impression that management is not managing or is hiding something. Regretfully I am a long long time T owner and have suffered through years of poor decisions. The stock is where it is for a reason and will not move until management is transparent and produces results that exceed forecasts
David Jonas profile picture
And I might suck in my gut, shave my back & get 30 minutes in a Motel 6 with J-Lo. It can happen.
William- Billy Hill profile picture
T's senior management and Board have been sleep walking for 15+ years. Look at the history of the share price for confirmation. Management and the Board have no credibility with the market. They created the problem and now must live with it. The shareholders would be better off in a CD.
I was laugh at and ridiculed when I said go short at 33.00 and it could see 20.00. Now I think it may see 12.00 on a recession. By the way what does the Dividend cost per Q ?
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