VZ Stock Shifts Lower on Mixed Earnings Reaction

The mobile provider's subscriber growth exceeded estimates

Deputy Editor
Jan 30, 2020 at 9:00 AM
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Blue chip name and mobile provider Verizon Communications Inc. (NYSE:VZ) is set to slide lower today, down 1.3% before the open after stepping into the earnings confessional with mixed results. Specifically, the firm reported fourth-quarter revenue of $34.7 billion --which exceeded analysts' expectations -- and better-than-expected subscriber growth. However, its adjusted profit of $1.13 per share just missed estimates. The company based its surge in subscriber growth on a big boost from Walt Disney's (DIS) Disney+ streaming service, which the mobile name included in some of its plans. 

The drop has VZ eyeing its lowest close in nearly five months, and breaching recent support at its 160-day moving average. This comes roughly one month after the equity hit an all-time high of $62.21, and despite the drop, Verizon is still up over 10.2% in the last 12 months, closing Wednesday at $59.53.

Analysts have remained quiet following Verizon's quarterly report, but most in coverage are cautious. In fact, 12 consider VZ a "hold," while only four say "strong buy." What's more, the consensus 12-month target price of $61.67 is a slim 3.6% premium to last night's close. 

A more bullish sentiment pervades the options pits. During the past 10 days, 22,467 long calls have crossed the tape, compared to just 5,125 long puts. Short sellers have started hitting the exits too, with short interest down 11.1% in the last reporting period. 

 

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