AT&T
Shares of AT&T Inc. (NYSE: T) have declined by more than 40% over the past 12 months. Since posting a 52-week high in early June, the shares have dropped by around 29%.
The company plans to get back into the telecom business by grabbing its share of the nearly $100 billion in federal dollars earmarked for expanding high-speed network services to America’s small towns and rural areas. AT&T needs the help: its stock posted a 52-week low last week and has been sagging for nearly 18 months now. Unlike rivals T-Mobile and Verizon, AT&T plans to boost its fiber offerings rather than its wireless network. The costs are much higher, though.
Sentiment on the stock remains moderately positive. Of 31 brokerages surveyed, 12 have a Buy or Strong Buy rating while 17 rate the shares at Hold. At a share price of around $15.30, the implied upside based on a median price target of $22.00 is nearly 44%. At the high price target of $28.00, the upside potential is about 83%.
Third-quarter revenue is forecast at $29.86 billion, up 0.7% sequentially but down 25.3% year over year. Adjusted EPS are forecast at $0.61, down 5.7% sequentially and by about 30% year over year. For the full 2022 fiscal year, EPS are expected to come in at $2.55, down 25.1%, on sales of $126.01 billion, down about 25.4%.
AT&T stock trades at about 6.0 times expected 2022 EPS, 6.1 times estimated 2023 earnings of $2.52 and 5.9 times estimated 2024 earnings of $2.58. The stock’s 52-week range is $14.46 to $27.48. AT&T’s current annual dividend is $1.11 (yield of 7.4%). Total shareholder return for the past 12 months was negative 15.8%.
Freeport-McMoRan
Over the past 12 months, shares of copper and gold miner Freeport-McMoRan Inc. (NYSE: FCX) have dropped by about 25%. Both gold and copper prices have tumbled from their recent peaks of early March. Copper has fallen by about 25% over the past 12 months, all of the decline coming since June. Gold prices are down about 6.5% year over year but have slipped by nearly 11% since June.
Falling construction in China has weighed on copper prices, and bearish sentiment on the commodity is based on the global economic slowdown. The bull case is longer term, seeing a doubling of demand by 2035 with reasonably steady annual growth largely due to investment in clean energy from wind and solar.
Of 20 analysts covering the stock, nine have placed a Buy or Strong Buy rating and 10 more rate the shares at Hold. At a share price of around $28.80, the implied upside based on a median price target of $34.00 is 18%. At the high price target of $55.00, the upside potential reaches 91%.
Third-quarter revenue is forecast at $4.86 billion, down 10.3% sequentially and by 20.0% year over year. Adjusted EPS are forecast at $0.27, down 53% sequentially and nearly 70% lower year over year. For the full 2022 fiscal year, analysts are expecting EPS of $2.51, down 19.7%, on sales of $22.34 billion, down 2.2%.
The stock trades at about 11.5 times expected 2022 EPS, 14.6 times estimated 2023 earnings of $1.98 and 11.9 times estimated 2024 earnings of $2.42. The stock’s 52-week range is $24.80 to $51.99. The company pays an annual dividend of $0.60 (yield of 2.17%). Total shareholder return for the past 12 months was negative 24.1%.
Originally posted at 24/7 Wall St.
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