Verizon Stock Could be Telecom's "Biggest Loser"

The equity is set to be the "biggest loser" in an increasingly competitive landscape

Deputy Editor
Aug 18, 2022 at 9:53 AM
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Blue-chip telecommunications name Verizon Communications Inc (NYSE:VZ) was just served a bearish note by MoffettNathanson. The analyst knocked the stock to "underperform" from "market perform," saying Verizon has been the "biggest loser" of AT&T's (T) aggressive promotional efforts, which have caused more competition in the wireless landscape. Ahead of the session's opening bell, VZ was last seen down 1.5% at $44.66. 

MoffettNathanson's move toward the sidelines is nothing new for Verizon stock. In fact, 14 of the 19 analysts following the equity called it a "hold" coming into today, though the five that said "buy" or better leave room for additional downgrades to follow. Plus, the stock's consensus 12-month target price of $53.05 is a 17% premium to last night's close, meaning a round of price-target cuts could also be overdue. 

Options traders, on the other hand, are still optimistic on the stock, with Verizon sporting a 10-day call/put volume ratio of 5.46 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 100th percentile of its annual range, which indicates the appetite for calls has never been healthier. 

On the charts, a mid-July bear gap pushed Verizon stock to a .five-year low of $43.77 on July 22, and an attempt at a rebound was met with resistance at the $44.50 level. More recently, shares have been grappling with the 20-day moving average, before failing at the trendline today. In the last 12 months, meanwhile, VZ has shed 20.4%.

 

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