Verizon Holds Near Highs After Earnings Beat

The blue chip also boasted strong subscriber growth

Deputy Editor
Oct 25, 2019 at 9:42 AM
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It was Verizon Communications Inc's (NYSE:VZ) turn to step into the earnings confessional this morning, reporting adjusted third-quarter earnings of $1.25 per share, and total revenue of $32.89 billion -- both of which beat analysts' estimates. The U.S. wireless carrier also boasted growth in subscribers that topped expectations, pushed higher in part by expanding its pricing plans, and said it will roll out between 20 to 100 million 5G connections by 2021. 

Nevertheless, the Dow component is down 0.4% to trade at $60.34, but holding in annual high territory in the $61 region. Since its last dip beneath the $55 region in early August, VZ has tacked on 10%, with recent support emerging at its 40-day moving average. In fact, the equity is now just within striking distance of its record Nov. 20 high at $61.58, with the shares consolidating below this area during the past few weeks. 

Surprisingly, most analysts are bearish on the blue chip, with only four of the 14 in coverage calling Verizon a "strong buy," compared to 10 "hold" recommendations. The consensus 12-month price target is right in line with current levels, too, which could lead analysts to reconsider their positions in the near future. 

Options traders, on the other hand, have been more bullish. During the last 10 days at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 3.17 calls have been bought to open for every put. This behavior is slightly unusual, too, considering this ratio sits in the 68th percentile of its annual range. 

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