Arvest Investments Inc. has acquired a new stake in AT&T Inc. (NYSE: T) during the third quarter of 2023. The institutional investor purchased 22,413 shares of the telecommunications giant, valued at approximately $633,000. This acquisition is part of a broader trend as several hedge funds and institutional investors continue to buy and sell shares of AT&T.
In the second quarter of 2023, Denali Advisors LLC increased its holdings in AT&T by 5.9%, now owning 401,037 shares valued at $11.6 million. Similarly, Tredje AP fonden boosted its stake by 1.8%, bringing its total to 1,221,395 shares worth $35.3 million after acquiring an additional 21,720 shares. CHURCHILL MANAGEMENT Corp also increased its investment by 1.5%, now holding 324,104 shares valued at $9.38 million.
Furthermore, Kickstand Ventures LLC made its entry into AT&T by purchasing a new stake valued at approximately $489,000. Sentry Investment Management LLC experienced a significant growth in its stake, increasing by 153.2% to own 22,095 shares, valued at $625,000. Collectively, hedge funds and institutional investors own 57.10% of AT&T’s stock.
Current Market Sentiment and AT&T’s Financial Performance
Recent developments indicate a positive sentiment surrounding AT&T. The company is projected to gain approximately $1.3 billion in annual revenue due to price hikes on wireless and internet plans. This increase could provide a near-term revenue boost that supports dividend coverage and debt reduction.
Market analysts suggest that AT&T is undervalued and poised for growth driven by demand for 5G, fiber, and machine-to-machine technology. A recent uptick in the stock price amidst a weaker overall market suggests renewed buying interest, particularly in dividend-yielding stocks.
Despite these positive indicators, AT&T faces challenges. Goldman Sachs recently cut its price target for AT&T from $33 to $29 while maintaining a “Buy” rating. This reduction may dampen momentum among investors closely tracking price targets.
Additionally, concerns from lawmakers regarding EchoStar’s spectrum sales to AT&T and SpaceX could result in regulatory scrutiny, potentially impacting AT&T’s spectrum buildout and 5G expansion plans. Ongoing legal matters related to data breaches also pose risks, with potential cash settlements and litigation costs on the horizon.
AT&T’s Financial Metrics and Future Outlook
As of Monday, October 22, 2023, AT&T’s stock opened at $24.11. The company has experienced a 12-month low of $21.38 and a high of $29.79. Financial metrics reveal a current ratio of 1.01, a quick ratio of 0.96, and a debt-to-equity ratio of 1.01. AT&T has a market capitalization of $170.95 billion, a price-to-earnings (P/E) ratio of 7.83, and a PEG ratio of 1.41.
The company reported its quarterly earnings on October 22, meeting the consensus estimate with an earnings per share (EPS) of $0.54. Although revenue reached $30.71 billion, it fell short of analyst expectations of $30.85 billion. Year-over-year, the company’s quarterly revenue increased by 1.7%.
AT&T also announced a quarterly dividend of $0.2775, set to be paid on February 2, 2024, to shareholders of record as of January 12, 2024. This dividend represents an annualized rate of $1.11 with a yield of 4.6% and a dividend payout ratio of 36.04%.
Research analysts have mixed views on AT&T’s stock. Loop Capital has set a price target of $29.00, while Sanford C. Bernstein increased its target from $31.00 to $32.00, giving the stock an “outperform” rating. Royal Bank of Canada revised its price objective down to $30.00, maintaining an “outperform” rating, while Raymond James Financial reissued a “strong-buy” rating with a target of $33.00.
Overall, AT&T’s performance in the stock market and its strategic moves will be closely watched as it navigates both opportunities and challenges in the telecommunications sector.
