Here I am going to value AT&T Inc. the Dallas, Texas based telecommunications provider. Actually, AT&T is the world's largest telecommunications company.
AT&T is valued at 210.19 billion USD by public markets currently. In my opinion, given the current coronavirus disease COVID-19 pandemic AT&T is approximately 20% undervalued.
Why? AT&T's main business lines are providing mobile and stationary telephone communications, internet and television services. Basically, AT&T is the provider of telecommunication pipes through which the USA communicates. Now, especially during the coronavirus disease COVID-19 lockdown, everybody relies on telecommunications to work remotely, communicate remotely with relatives, order food and groceries online, pay utility bills which provide for essentials like water, electricity and heating.
Our modern day society is built around telecommunications, internet especially. People are social creatures, they need to communicate so telecommunications companies like AT&T are vital for to work, study and survive nowadays.
AT&T is currently trading at 15.05 trailing Price/Earnings ratio, 1.18 Price/Book ratio and 1.20 Price/Sales ratios. Actually, AT&T forward Price/Earnings ratio is estimated at 9.00. The forward Price/Earnings ratio is not a very reliable indicator since it is very difficult to estimate forward earnings, especially now. AT&T's trailing dividend yield is 6.98%.
That said, I think according to the aforementioned metrics AT&T is 20% undervalued. The main reason is that mobile and stationary telephone communications, internet and television services are indispensable, now especially, and their usage is increasing currently given that everybody is social distancing. The demand for AT&T's services will increase markedly in 2020. This will most probably be reflected in higher revenue and profits for AT&T. It is remarkable that Amazon, which basically relies on AT&T to do business is up year to date, while AT&T is down 23.5% since the beginning of 2020.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
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Respectfully yours,
Petar Posledovich
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