AT&T Stock To $18?

Our machine-driven multi-factor assessment suggests that it may be time to sell T stock. We have, overall, a pessimistic view of the stock, and a price of $18 may not be out of reach. We believe there are a few things to fear in AT&T stock given its overall Weak operating performance and financial condition. Hence, despite its Low valuation, this makes the stock look Risky.

Below is our assessment:

Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. We go beyond just equities. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more during the next 1-3 years, and protect you better if markets crash 20%? We have crunched the numbers.

Let’s get into details of each of the assessed factors but before that, for quick background: With $181 Bil in market cap, AT&T provides global telecommunications, media, and technology services, including wireless voice and data, handsets, computing devices, and video services in Latin America.

[1] Valuation Looks Low

This table highlights how T is valued vs broader market. For more details see: T Valuation Ratios

[2] Growth Is Weak

• AT&T has seen its top line grow at an average rate of 0.6% over the last 3 years
• Its revenues have grown 1.5% from $122 Bil to $124 Bil in the last 12 months
• Also, its quarterly revenues grew 3.5% to $31 Bil in the most recent quarter from $30 Bil a year ago.

This table highlights how T is growing vs broader market. For more details see: T Revenue Comparison

[3] Profitability Appears Strong

• T last 12 month operating income was $25 Bil representing operating margin of 19.9%
• With cash flow margin of 33.0%, it generated nearly $41 Bil in operating cash flow over this period
• For the same period, T generated nearly $13 Bil in net income, suggesting net margin of about 10.3%

This table highlights how T profitability vs broader market. For more details see: T Operating Income Comparison

[4] Financial Stability Looks Weak

• T Debt was $150 Bil at the end of the most recent quarter, while its current Market Cap is $181 Bil. This implies Debt-to-Equity Ratio of 82.8%
• T Cash (including cash equivalents) makes up $10 Bil of $405 Bil in total Assets. This yields a Cash-to-Assets Ratio of 2.6%

[5] Downturn Resilience Is Weak

T has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• T stock fell 45.7% from a high of $24.76 on 10 May 2021 to $13.45 on 18 July 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 10 February 2025
• Since then, the stock increased to a high of $29.62 on 15 September 2025 , and currently trades at $25.14

 
2020 Covid Pandemic

• T stock fell 31.4% from a high of $29.62 on 22 January 2020 to $20.31 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high

 
2008 Global Financial Crisis

• T stock fell 49.3% from a high of $32.50 on 26 September 2007 to $16.48 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 30 June 2016

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read T Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.