AT&T stock (NYSE:T) has declined by around 9% over the last month, underperforming the S&P 500 which has gained about 5% over the same period. There are a couple of factors weighing AT&T stock down. While AT&T published a stronger than expected set of results for Q2 2022, posting strong growth in the lucrative postpaid business, it cut its free cash flow outlook for the year from $16 billion to $14 billion. The lower guidance is partly due to the investments the company is making into its 5G network and also due to slightly later bill payments by customers, amid a weakening economy and low consumer confidence. Separately, over the last month or so, investors have warmed up to beaten-down technology and growth stocks and this could be hurting low-growth value picks such as AT&T.
However, now that AT&T stock has seen a decline of about 9% over the last month, will it continue its downward trajectory in the near term, or is a rally imminent? Going by historical performance, there is a 68% chance of a rise in T stock over the next month. Out of 116 instances in the last ten years that AT&T stock saw a twenty-one-day decline of 9% or more, 79 of them resulted in AT&T stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 79 out of 116, or a 68% chance of a rise in T stock over the coming month, implying a positive near-term outlook for the stock. See our analysis on AT&T Stock Chance of A Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data
- After moving -11% or more over five days, the stock rose in the next five days on 50% of the occasions.
- After moving -12% or more over ten days, the stock rose in the next ten days on 41% of the occasions
- After moving -9% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 68% of the occasions.
With inflation rising and the Fed raising interest rates, AT&T has fallen 3% this year. Can it drop more? See how low can AT&T stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
|S&P 500 Return||5%||-17%||77%|
|Trefis Multi-Strategy Portfolio||10%||-16%||235%|
 Month-to-date and year-to-date as of 7/25/2022
 Cumulative total returns since the end of 2016