Barclays Moves to Sidelines After Verizon Stock Rally

VZ shares recently tagged a multi-year high

Managing Editor
Sep 4, 2018 at 9:44 AM
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Verizon Communications Inc. (NYSE:VZ) stock is down 2.2% at $53.10 in early trading after receiving a downgrade to "equal weight" from "overweight" at Barclays, alongside a price-target cut to $50 from $56. An analyst at the firm said they're still optimistic about the telecom company's near-term growth, but that it's already priced into the stock.

Verizon Communications stock has been outperforming on the charts in recent months, recently climbing to a fresh two-year high of $55.21 on Aug. 17. In fact, VZ hasn't closed below its 20-day moving average since July. This comes after the equity spent March through June hovering below the $50 mark.

Most analysts are already bullish on the security, with 12 of 19 in coverage handing out "buy" or "strong buy" ratings. Near-term options traders are also seemingly upbeat, since the Schaeffer's put/call open interest ratio (SOIR) of 0.62 ranks in the low 28th annual percentile. In other words, call open interest for options expiring within three months outweighs put open interest by a wider-than-usual margin.

Plus, traders currently purchasing premium on Verizon stock's near-term options may be in luck, considering the security's Schaeffer's Volatility Index (SVI) of 14% ranks in the 7th annual percentile. In short, short-term options are pricing in lower-than-usual volatility expectations at the moment.

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