Travelers, Verizon, Visa Stocks Could Swing on Earnings

Shares of Travelers, Verizon, and Visa could make big moves after earnings

Apr 19, 2017 at 10:45 AM
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As usual, Wall Street's been captivated by the start of first-quarter earnings season. Things could get even wilder tomorrow, especially for the Dow, with three blue-chip stocks scheduled to report. Specifically, shares of Travelers Companies Inc (NYSE:TRV), Verizon Communications Inc. (NYSE:VZ), and Visa Inc (NYSE:V) could make bold moves, after the respective firms hit the earnings stage.

Travelers Earnings History is Bleak

If past is prologue, TRV stock could suffer after tomorrow morning's earnings report. The shares have posted negative returns in the session after the company's released data in five consecutive quarters. Of course, even if TRV stumbles, the fact is it's been a beast over the past six months. Since bottoming at $103.45 in early November, the stock has soared 17% to $121.03.

Options traders have been betting on (or could be shareholders hedging against) losses in the shares. Travelers Companies Inc has racked up a 10-day put/call volume ratio of 2.82 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- ranking in the bearishly skewed 80th annual percentile. Analysts are quite skeptical, too, dishing out 10 "hold" or "strong sell" ratings, against just five "buy" or better opinions. If TRV stock can surprise to the upside after earnings, an unwinding of negativity could add fuel to its fire.

Verizon Options Traders Optimistic Ahead of Earnings

VZ's post-earnings performances have been similarly dreary. Specifically, the stock has posted negative returns after the past four quarterly events. This doesn't bode well for tomorrow, with Verizon scheduled to report before the opening bell. More generally, the shares have underperformed, as well, losing 7.5% year-to-date at $49.38 -- earning them a tepid "hold" rating and $50 price target at SunTrust Robinson this morning.

This negativity is more of the same for Verizon Communications Inc. among the brokerage crowd. Nineteen of 24 analysts rate the stock a "hold" or "strong sell." By contrast, options traders have been surprisingly upbeat, based on VZ's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.24 -- outstripping two-thirds of ratings from the last 52 weeks.

Analysts Bullish Ahead of Visa Earnings 

Finally, V -- which reports after the close tomorrow -- has alternated between post-earnings gains and losses over the past eight quarters. If this trend holds up, the stock could retreat on Thursday, since it gained 4.6% in the session subsequent to releasing data in early February. Longer term, Visa stock has been strong, up 16% year-to-date at $90.51 -- not far from its late-March record high at $92.05.

Understandably, Wall Street has taken a glass-half-full approach toward V stock. The equity sports a 10-day call/put volume ratio of 3.59 at the ISE, CBOE, and PHLX -- just 4 percentage points from an annual peak. Plus, 18 of 21 analysts rate Visa Inc shares a "buy" or better, with not a single "sell" assessment to be found.

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