Home Investing Should I buy Verizon Communications shares after Q2 results?

Should I buy Verizon Communications shares after Q2 results?

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Verizon Communications Inc. (NYSE: VZ) reported its second-quarter results on Friday and updated its guidance for the 2022 fiscal year. Verizon shares have weakened from $51.22 to $43.77 since the beginning of July 2022, and the current price stands at $44.55.

Verizon updated its guidance for the 2022 fiscal year

Verizon Communications reported its second-quarter results on Friday; total revenue of $33.8 billion was flat Y/Y, while the non-GAAP EPS for the same period was $1.31 (missed by $0.01).

It is important to say that the second quarter earnings include a pre-tax loss from special items of approximately $435 million, including a net pre-tax charge of approximately $198 million and the amortization of intangible assets related to TracFone and other acquisitions that were $237 million.

Verizon delivered excellent wireless volumes during the second quarter, with 430,000 net adds, including 227,000 postpaid phone net adds, which marked its third consecutive quarter exceeding 200,000 wireless phone net adds.

Wireless service revenue growth and higher wireless equipment revenue were offset primarily by wireline declines and the net impact of merger and acquisition (M&A) activity in 2021. Hans Vestberg, Chairman and Chief Executive Officer of Verizon Communications, said:

The inflationary environment is clearly impacting consumer behavior, and we also saw intensified competition for consumer attention. While I am confident that we have the right strategy in place, we will continue to refine our approach as the consumer market evolves.

Verizon updated its guidance for the 2022 fiscal year, and it reported that it expects wireless service revenue to grow between 8.5% to 9.5%, while the EPS should be in the range of $5.10 to $5.25 ( the prior guidance was $5.40-5.55).

Verizon finished the second quarter of 2022 with a good position on the market, its shares are trading at less than five times TTM EBITDA, and with a market capitalization of $186 billion, they are not expensive.

The dividend yield is around 5.7% at the current share price, and shares of this company could be a good choice for any investor seeking secure dividend income.

Technical analysis

Verizon’s stock price has fallen more than 15% after reaching the highest level in 2022 of $55.51 on April 21, and the risk of further decline still persists. Despite this, shares of this company could provide strong returns for long-term investors.

Data source: tradingview.com

The strong support level stands at $40, while $50 represents the important resistance level. If the price falls below $40, it would be a “sell” signal, and we have the open way to $38 or even below.

On the other side, if the price jumps above $50, the next target could be at $52.

Summary

Verizon Communications reported its second-quarter results on Friday and updated its guidance for the 2022 fiscal year. Verizon finished the second quarter with a good position on the market, and shares of this company could be a good choice for any investor seeking secure dividend income.

The post Should I buy Verizon Communications shares after Q2 results? appeared first on Invezz.

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