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Verizon Communications (VZ) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Verizon Communications (VZ) closed the most recent trading day at $55.50, moving -1.93% from the previous trading session. This move lagged the S&P 500's daily gain of 0.28%. At the same time, the Dow added 0.07%, and the tech-heavy Nasdaq gained 0.71%.

Prior to today's trading, shares of the largest U.S. cellphone carrier had lost 1.31% over the past month. This has lagged the Computer and Technology sector's gain of 2.34% and the S&P 500's gain of 1.93% in that time.

Wall Street will be looking for positivity from VZ as it approaches its next earnings report date. This is expected to be August 1, 2019. In that report, analysts expect VZ to post earnings of $1.20 per share. This would mark no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.40 billion, up 0.6% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.75 per share and revenue of $131.82 billion. These totals would mark changes of +0.85% and +0.73%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for VZ. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. VZ is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, VZ currently has a Forward P/E ratio of 11.91. This valuation marks a discount compared to its industry's average Forward P/E of 15.59.

Also, we should mention that VZ has a PEG ratio of 2.8. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Wireless National industry currently had an average PEG ratio of 2.04 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow VZ in the coming trading sessions, be sure to utilize Zacks.com.


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