AT&T Is Best-Performing Large-Cap Telecom Stock This Year But Retail Sentiment Languishes At 6-Month Low

Telecom giant AT&T is currently the 11th best-performing S&P 500 stock and its strength has come amid volatile market conditions. Telecoms are typically defensive bets as demand for communication services remains strong even in recessionary conditions.

AT&T stock has gained nearly 23% this year, which compares favorably to the S&P 500 Index’s 2.9% year-to-date loss and the Nasdaq Composite’s 7.3% plunge. 

The rally has been supported by its defensive appeal and the company’s improved fundamentals. In late January, the AT&T stock gap opened higher after the Dallas, Texas-based company reported fourth-quarter results that aligned with expectations.

Sell-side analysts lauded the subscriber growth and progress with cost elimination. They also expressed confidence that the company’s organic growth will be robust enough to offset the anticipated increase in cash taxes in 2025 and the significant capex spending on fiber and wireless networks.

After a runup until early March, the stock paused for a breather but resumed the uptrend in mid-March.

On Wednesday, AT&T defied the broader market weakness due to the optimism generated by reports of the company buying Lumen Technologies, Inc.’s (LUMN) consumer fiber business for about $5.5 billion.

Commenting on the rumored deal, BofA Securities said Lumen's mass market segment covers 16 midwestern and western states with virtually no state-level overlap with AT&T. The brokerage believes a potential combination offers upside to AT&T's 50 million fiber passings target.

BofA has a ‘Buy’ rating and a $28 price target on AT&T shares.

Last week, RBC Capital upped the price target for AT&T stock to $28 from $27, while maintaining an ‘Outperform’ rating. 

Earlier this month, AT&T said it remains on track to meet all of the 2025 and multi-year financial and operational guidance and capital allocation plans issued in its fourth-quarter earnings call. But peer Verizon, Inc.'s (VZ) comments on competitive pressure weighed down on AT&T as well.

T sentiment and message volume March 27, as of 3:19 am ET | Source: Stocktwits

On Stocktwits, retail sentiment toward AT&T stock remained ‘extremely bearish’ (15/100), with the message volume at ‘extremely low’ levels. The sentiment reading fell to the worst levels since late September.

A watcher said last week that AT&T stock will likely fall back to the trendline around $25.

The recent runup in the stock may have also served as a pushback. 

The Koyfin-compiled consensus price target for AT&T stock is $27.25, implying 1.5% downside from current levels. 

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