Sign InSummary
Verizon Communications Inc. (VZ) closed at $35.13 on October 31, 2023, with a 1.47% increase, showing upward momentum and increased investor interest, as its positive financial performance and strong earnings lead to a 'Buy' rating, although potential short-term volatility should be monitored.
Overview
Verizon Communications Inc. (NYSE:VZ) closed at $35.13 on October 31, 2023, indicating a 1.47% increase. Despite being below its current 200-day moving average of $36.05, it is above the 50-day moving average of $32.96, suggesting upward momentum. The company has a market capitalization of $147.69 billion and an average trading volume of 22.69 million shares. Notably, the volume of trade for the day was higher than the average, closing at 28.87 million shares. This heightened trade volume might suggest increased investor interest in the stock.
Technical Analysis
From a technical standpoint, the relative strength index (RSI) of 69 is approaching the overbought level, indicating that the stock may be due for a short-term pullback or period of consolidation. The MACD of -0.282 implies that the bearish momentum is slowing. With support at $34.3 and no specified resistance, coupled with an Average True Range (ATR) of 2.47, the stock has room for both upward and downward movement.
The stop-loss has been calculated at $33.86. Therefore, if the stock were to break lower than this level, traders might want to exit their positions to limit potential losses. The discounted cash flow (DCF) value of $35.75 is slightly above the current price, suggesting the stock is slightly undervalued.
Fundamental Analysis
Fundamentally, Verizon's EPS stands at $4.97 with a relatively low P/E ratio of 7.07. This could mean that the company's profits are reasonably strong, and the stock may be undervalued. Verizon has also shown a positive quarterly earnings result with a 2.9% YoY growth in wireless service revenues and an over 28% YoY increase in free cash flow. Such improvements hinge positively on the company's financial health, and might prompt optimistic investor sentiment.
The consensus analyst target points out a median of $55, significantly higher than the current price. Moreover, analyst ratings strongly favor a 'buy' stance on the stock with 10 buys and 4 holds. This provides a positive signal for the stock's future performance.
News and Market Sentiment
News sentiment around Verizon is largely positive, with recent stories highlighting the company's positive quarterly results and improved financial outlook due to its increase in free cash flow. This might reflect positively on the company's potential to pay down debt and fund other beneficial activities such as share buybacks. Furthermore, Verizon's inclusion among 'Value Stocks That Could Double Your Money by 2024' and references to it as a high-paying dividend stock for income-loving investors further strengthen its positive reputation in the marketplace.
Future Outlook and Rating
Using the available data, the predicted price for the next trading day of November 01, 2023, would be within the proximity of its last closing price at $35.13, whereas over the upcoming week, considering current momentum and technical indicators, it could oscillate around its 50-day moving average of $32.96, while targeting its DCF at $35.75.
In sum, considering its solid financial performance, promising earnings, increased market interest, and the positive fundamental and technical indicators, the stock is rated as a 'Buy'. However, investors should monitor the RSI and MACD for potential short-term volatility and use the recommended stop-loss level of $33.86 to protect against possible losses.
