While VZ stock (NYSE:VZ) has regularly lagged behind the S&P 500, the telecoms behemoth often draws income-seeking investors due to its dividend.
According to a Morgan Stanley analysis, Verizon stock (NYSE:VZ) is presently trading at a low price not seen since 2017. In 2022, VZ has retreated about 23%. The S&P 500 is also down around 23%.
Verizon stock (NYSE:VZ) will report third-quarter results on Friday, October 21.
Losses in Market Share for Verizon Stock
Moffett Nathanson analyst Craig Moffett recently downgraded Verizon stock (NYSE:VZ) to underperform. “2020’s second quarter has seen Verizon launch experienced market share declines in both total phones and postpaid phones,” he said.
Meanwhile, Warren Buffett’s Berkshire Hathaway (BRKB) sold the remaining 1.4 million Verizon shares in the second quarter.
Verizon stock (NYSE:VZ) results for the second quarter fell short of expectations. The telecom business has reduced Verizon stock’s EPS projection for 2022.
Is Verizon Stock a Defensive Move?
Telecom stocks had been seen as a defensive trade amid fears that the US economy would enter a recession. Verizon stock(NYSE:VZ), a Dow component, offers a 4.8% dividend.
One risk to Verizon stock (NYSE:VZ) is the purchase of a mid-band radio spectrum for 5G wireless services. Verizon shares spent $53 billion in a federal auction, including incentive payments to satellite operators and clearance charges. The acquisition of the mid-band spectrum for 5G services will postpone a Verizon stock (NYSE:VZ) repurchase.
Verizon stock (NYSE:VZ) sold a 90% share in its media and advertising company to Apollo Global Management for $5 billion in May 2021.
In bright light, Verizon completed its $6.25 billion acquisition of Tracfone from Mexico-based America Movil in November (AMX). Tracfone is a provider of pre-paid cellphone services.
VZ Stock: Content Acquisitions
Verizon and Walt Disney (DIS) have collaborated on video streaming services. In August, Disney and Verizon extended their streaming relationship to include Hulu and ESPN+. Verizon has also worked with Apple (AAPL) Music and sports leagues.
Verizon will add Discovery (DISCA) as a video streaming partner in December 2020.
“We continue to believe Verizon’s streaming deals with Disney, Discovery, and the NFL, as well as gaming collaborations with Apple/Google,” Raymond James analyst Frank Louthan said in a note to clients.
VZ Stock: New Top Management
Verizon stock (NYSE:VZ) has had several strong runs since the global crisis of 2008-2009, thanks to low borrowing rates. At one time, the telecom behemoth climbed to the top of the IBD Leaderboard. It is a hand-picked list of prominent stocks that stand out regarding technical and fundamental criteria.
Verizon is much more involved in the US wireless business than competitor AT&T. Verizon’s wireless division accounts for roughly 85% of its adjusted profits.
Since purchasing Vodafone Group’s (VOD) 45% interest in a cellular joint venture for $130 billion in early 2014, the corporation has paid down debt.
Is it a good time to buy VZ stock?
According to the IBD Stock Checkup, VZ stock has a Relative Strength Rating of 30 out of a possible 99. The top stocks have an RS rating of 80 or above.
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