Verizon Stock Slips Ahead of Q2 Earnings Report

The equity is down 9.2% year-over-year

Fernanda Horner
Jul 22, 2020 at 3:04 PM
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The shares of Verizon Communications Inc. (NYSE: VZ) are down 0.3% at $55.73 this afternoon. The lackluster price action comes just a few days ahead of the company's fiscal second-quarter report, due out before the open on Friday, July 24. Below, we will look at how the stock has performed on the charts as of late, and explore some of the options activity surrounding VZ ahead of the event.  

Digging deeper, the equity is still working on recovering from its mid-March lows near the $48 level. However, even though shares rallied back to the $58 mark in April, they have been trading sideways ever since, with their 320-day moving average keeping a lid on any rallies. Year-over-year, VZ sports a 9.2% deficit.

VZ 320

Analysts were split toward the equity coming into today. Of the 13 in coverage, seven carry a tepid "hold" rating, while the remaining six sport a "buy" or better. Meanwhile, the stock's 12-month consensus target price of $60.70 is a 8.9% premium to current levels.

The options pits, however, show calls hold the advantage. In the past 10 days, 20,734 calls have exchanged hands on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to a meager 3,819 puts. The resultant call/put volume ratio of 5.43 sits in the 96th percentile of its annual range, suggesting a healthier-than-usual appetite for bullish bets of late. 

Lastly, a look at the equity's history of post-earnings reactions during the past two years shows a generally dismal response. During its last eight reports, more than half of these next-day sessions were lower, including a 3.3% slip in January 2019. The security averaged a post-earnings swing of 1.5% the last eight quarters, regardless of direction. This time around, the options market is pricing in a slightly higher move of 3.2%. 


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