Verizon (VZ) Trading Higher After Beating Estimates

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Verizon (VZ) Trading Higher After Beating Estimates

Verizon Communications Inc. (VZ) is trading higher after the business posted earnings per share (EPS) of $1.18, above expectations for the second quarter of 2020 by $0.03. Revenues of $30.4 billion were down 5.2% year on year but nevertheless exceeded forecasts, which had been lowered owing to the effect of the COVID-19 epidemic. The telecoms behemoth confirmed moderate sales projection for fiscal year 2020, which was hampered by large decreases in cellular equipment revenues owing to “poor in-store engagement.”

Key Takeaways

  • Verizon exceeded both top- and bottom-line expectations.
  • Since 2018, the stock has failed to produce increases.
  • Income-seeking shareholders have been drawn in by the high dividend yield.

This classic sluggish movers has remained in place since the fourth quarter of 2018, with the most of the time spent fluctuating around the mid-$50s. The substantial 4.40% future dividend yield has given stockholders peace of mind, particularly during the 2020 pandemic-driven gyrations. Accumulation, on the other hand, has worsened in recent months, with investors shifting into growth prospects that lost value during the first-quarter downturn. This may put Verizon stock under pressure for the remainder of the year.

Verizon is now rated as a “Moderate Buy” by Wall Street, with three “Buy” and seven “Hold” recommendations. None of the experts advise shareholders to liquidate their investments and wait on the sidelines at this time. Price targets vary from $57 to $70 on the Street, with the company now trading around $1 below the low goal. This positioning suggests that the median goal of $61 will see fresh gains.

  The Top Technical Indicators for Options Trading

A price target is an analyst’s forecast for the future value of an asset. Price goals may apply to a variety of instruments, ranging from complicated investment products to stocks and bonds. An analyst attempts to assess what a stock is worth and where the price will be in 12 or 18 months when establishing a price objective for it. Finally, price objectives are determined by the entity issuing the shares.

Verizon Communications Long-Term Chart (2000 – 2020)

In the fourth quarter of 1999, a multi-year uptrend reached an all-time high of $64.75 before giving way to a convoluted downturn that found support in the mid-$20s in 2002. A quick climb into the high $30s paused towards the conclusion of the year, producing a resistance level that was eventually overcome in the third quarter of 2007. The breakthrough failed in January 2008, resulting in a slide that escalated amid the economic crisis until bottoming out in the lower $20s, a 16-year low.

In 2012, the stock completed a round trip to its 2007 high and broke out, launching a robust rally that halted in the mid-$50s in 2013. Since then, price action has carved a sequence of nominally higher highs, culminating in a 20-year high in December 2019 that is less than three points below 1999 resistance. It hit a 21-month low in March 2020 and then rebounded sharply, stabilizing near the mid-$50s in the third quarter.

Verizon Communications Short-Term Chart (2017 – 2020)

The 2018 purchasing wave surpassed the.786 Fibonacci retracement of the nine-year slide, increasing the likelihood that the price would finally complete a 100% retracement into the mid-$60s. However, for the last 21 months, it has been testing the.786 level, grinding through a holding pattern that shows no evidence of generating a sustainable trend, upwards or down. The stock has now stabilized near the.50 retracement of the first-quarter fall, suggesting that bull and bear forces are in balance.

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The accumulation-distribution indicator on-balance volume (OBV) hit a six-year high at the end of 2019 before entering a distribution wave that reached its lowest level since August 2018 in May. OBV has scarcely moved in the last two months, but Friday’s buy-the-news response might boost sluggish sentiment, perhaps sending it into the low $60s. Nonetheless, serious purchasers must act quickly to avoid a gravity-driven downfall.

On-balance volume (OBV) is a technical trading momentum indicator that utilizes volume flow to forecast stock price fluctuations. Granville’s New Key to Stock Market Profits, published in 1963, was the first to use the OBV measure.

The Bottom Line

Verizon stock is up after the telecom company topped top- and bottom-line projections in its most recent earnings report, although upward and negative prospects are limited at this time.

At the time of publishing, the author had Verizon stock in a family account.

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