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Verizon Communications (VZ) seems to be an attractive choice as it has recently been upgraded to a Zacks # 2 (Purchase) ranking. This upward trend in earnings estimates – one of the most powerful factors affecting share prices – has caused this change in rating.
The Zacks rating is based solely on the evolution of a company's results. It tracks BPA estimates for the current and subsequent years of analysts on the sellers' side that cover stocks through a consensual measure – the Zacks consensus estimate.
Since the evolution of results is a powerful factor influencing short-term stock price fluctuations, the Zacks rating system is very useful for individual investors. They may have difficulty making decisions based on Wall Street analysts' valuations of valuations, which are primarily motivated by subjective factors that are difficult to identify and measure in real time.
As a result, Zacks' improved rating for Verizon essentially reflects a positive outlook on its earnings outlook, which could result in buying pressure and higher share prices.
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The variation in a company's future earnings potential, as reflected in revisions to earnings estimates, has been shown to be highly correlated with the short-term price movements of its shares. This is partly explained by the influence of institutional investors using profit estimates and profit estimates to calculate the fair value of a company's shares. An increase or decrease in the estimated earnings in their valuation models simply translates into an increase or decrease in the fair value of a stock, which institutional investors generally buy or sell. Their transaction of large quantities of shares then causes a fluctuation of the prices of the stock.
Basically, the increase in profit estimates and the subsequent rating modernization for Verizon imply an improvement in the underlying business of the company. Investors should show their appreciation of this business trend by pushing the title higher.
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Empirical research shows a strong correlation between trends in earnings estimates and stock movements in the short term. It would be really rewarding to follow these revisions to make an investment decision. It is here that the proven Zacks Rank inventory evaluation system plays an important role in effectively leveraging the power of revisions to profit estimates.
The largest US mobile operator is expected to earn $ 4.73 per share for the year ended December 31, 2019, representing a 0.4% year-over-year change.
Analysts have regularly increased their estimates for Verizon. Over the past three months, Zacks' consensus estimate for the company has increased by 1.9%.
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In contrast to the overly optimistic Wall Street analysts, whose rating systems tend to be biased towards favorable recommendations, Zacks' rating system retains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 50,000. 4000 shares at any time. Regardless of market conditions, only the top 5% of Zacks-backed shares are rated Strong Buy and the next 15% is Purchase. Thus, placing a share in the top 20% of Zacks-backed shares is a testament to its superior profitability review feature, making it a strong candidate for superior market returns over the short term.
The Verizon upgrade to Zacks rank 2 positions it in the top 20% of Zacks' stock in terms of revisions, which implies that the stock could increase in the short term.
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Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report
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Verizon Communications Inc. (VZ): Free Stock Analysis Report
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To read this article on Zacks.com, click here.
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Zacks Investment Research"data-reactid =" 39 ">
Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks Investment Research
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