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Friday's Featured Content Technical and Fundamental Indicators Say This Stock Is a SellAuthored by Jordan Chussler. First Published: 2/26/2026. On paper, a company that just turned 141 years old and was able to increase its net income from $10.7 billion in 2024 to $21.9 billion in 2025 may not seem like a likely sell candidate. That argument becomes even harder to make when considering that its stock is up nearly 12% year-to-date, its forward price-to-earnings (P/E) ratio is 12.88, its net profit margin exceeds 17%, and it has a beta of 0.39—about 61% less volatile than the broad market. But for communication services mainstay AT&T (NYSE: T), swing and momentum traders may want to consider locking in profits: a regression to the stock's moving averages appears likely. A Combination of Short-term Technical Indicators Are Flashing Warning Signs In November 2025, the moving averages on AT&T's one-year chart formed a bearish death cross. However, instead of plunging after the 50-day moving average crossed below the 200-day moving average, the stock mostly traded in a range. That changed on Jan. 27, when shares of T shot up more than 25% through Feb. 12, briefly pushing above both the 50- and 200-day MAs. At the peak of that run, the stock's Relative Strength Index (RSI) climbed as high as 81.89. The catalyst was the telecom company's full-year and Q4 2025 earnings report on Jan. 28, when AT&T reported earnings per share (EPS) of $0.52, beating expectations of $0.46, and quarterly revenue of $33.47 billion, topping estimates of $32.91 billion. But the rally was driven more by earnings-season fervor than by underlying fundamentals. When a stock's RSI moves well above 70, it typically signals an overbought condition and increases the risk of a bearish reversal. 
Key Points - Despite being up 12% this year, AT&T’s technical chart suggests its current pullback is just the start of more downside price action.
- Strong net income in 2025 appears to be an outlier compared to the five-year average, while the company’s EBITDA will suffer due to a recent acquisition.
- In the short-term, the stock could fall at least 7% before testing its 50-day moving average around $25.46, and potentially further if that support fails.
- Special Report: [Sponsorship-Ad-6-Format3]
That is what followed: AT&T's RSI has fallen to about 56.06, and shares have declined nearly 5%. There could be another ~7% of downside before the stock tests its 50-day moving average near $25.46. Short-term traders who anticipated the pullback may already have locked in most of their earnings-driven gains. Those who ignored the technical signals should keep a close eye on the company's financials for further warning signs. Uninspiring Revenue Growth and a Stagnant Dividend Are Cautionary Tales Beyond technicals, the company's financial metrics provide little comfort. As noted, AT&T's P/E ratio of 12.88 suggests value, but not necessarily in the short term. The telecom firm's nearly 105% year-over-year net income increase—from $10.7 billion in 2024 to $21.9 billion in 2025—looks like an outlier. Excluding 2025's result, AT&T's five-year average net income is $6.14 billion, roughly 72% lower than 2025's figure. Revenue growth has also been lackluster. Over the past five years, revenue has declined at an annualized rate of about -2.83%, with contractions in three of the last five years (2021, 2022 and 2024). The stock's stagnant dividend is another warning sign. AT&T cut its payout by nearly 50% in 2022, when the yield was 7.65%. The quarterly per-share payout fell from $0.52 to $0.27 and has mostly held at that level since, as management prioritized debt reduction and balance-sheet repair. Long term, AT&T may eventually restore dividend growth. For now, however, the dividend—which has an annualized five-year growth rate of -11.80%—is less a warning for income investors than a symptom of financial strain that short-term traders should monitor. Even after the yield reduction, AT&T's net cash from financing activities has been negative for several quarters; it was -$8.78 billion in Q4 2025, underscoring ongoing cash outlays for dividends, debt service and other financing needs. On its recent earnings call, the company said near-term leverage will push adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) materially lower by year-end after the acquisition of Lumen Technologies' (NYSE: LUMN) mass-market fiber business closes—the benefits of which are not expected to meaningfully improve EBITDA until around 2028. Wall Street's Sentiment Remains Positive Despite these headwinds, Wall Street remains mostly bullish. Of the 23 analysts covering T, 15 rate it a Buy. Overall, the stock carries a Moderate buy rating with a consensus one-year price target of $29.93, roughly 9% above the current share price. Current short interest is 1.60%—just over 11 million shares of roughly 7 billion outstanding—and is more than 14% lower than a month ago. Despite institutional ownership of 57.10% (below the average for large caps), inflows of over $24 billion in the past 12 months have more than doubled outflows of about $10 billion. Still, institutional selling in Q4 was higher than at any time in the past three years.
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