Why AT&T (T) Is Up Today

Update (4:30 p.m. EST): Updated with closing price, day high and low prices, price change and volume information.

NEW YORK (TheStreet) -- AT&T Inc.  (T) rose 0.93% to $33.79, up 31 cents from its previous close of $33.48, at the close of the trading day on Wednesday after a federal appeals court ruled against the Federal Communications Commission's (FCC) net neutrality rule.

The stock had a volume of 25,732,529, above its average of 22,458,400. It hit a high of $34 and a low of $33.55 for the day.

The court ruled the FCC had no right to tell Verizon (VZ) that it could not charge different prices to different content providers based on their number of users and bandwidth. This reversed the FCC's rule of net neutrality, which would have Internet service providers and the government treat all data on the Internet equally regardless of user, platform, etc. 

Verizon's stock rose on Wednesday, gaining 2.2% to $48.10, with AT&T piggybacked off the ruling.

TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AT&T INC (T) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • T's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AT&T INC has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, AT&T INC increased its bottom line by earning $1.21 versus $0.66 in the prior year. This year, the market expects an improvement in earnings ($2.48 versus $1.21).
  • The net income growth from the same quarter one year ago has exceeded that of the Diversified Telecommunication Services industry average, but is less than that of the S&P 500. The net income increased by 4.9% when compared to the same quarter one year prior, going from $3,635.00 million to $3,814.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, AT&T INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • You can view the full analysis from the report here: T Ratings Report

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