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On a generally down Tuesday for the stock market, Verizon Communications‘ (VZ -2.41%) shares did worse than those of many other companies. The telecom giant saw its stock price erode by nearly 2.5%, amid a general slump in tech stocks and related titles, combined with a discouraging price cut from a prominent bank.
Before market open, analyst Bryan Craft of Deutsche Bank enacted a 10% cut to his level on Verizon stock. He now feels it is worth $45 per share, down from his previous estimation of $50. This doesn’t change his recommendation on the company, however, which remains a hold.
The reasoning behind Craft’s move wasn’t immediately apparent.
Nevertheless, it didn’t come at an ideal time. On Monday, many investors sold out of tech and tech-adjacent stocks on the back of several disheartening developments. Among these was a recommendation downgrade on sector bellwether Microsoft from Guggenheim, and another by JMP Securities on the shares of social media mainstay Snap.
Investors might also be hungry for good news from Verizon, which is currently undergoing the long process of rolling out its next-generation 5G wireless service. Understandably, the company aims to blanket as much of its coverage area as possible with the speedy standard. That effort that will continue to eat up capital and resources before it starts to produce truly meaningful returns.
So buy-and-hold types might want to consider Verizon as a bargain play just now. Dividend stock fans might also think about pulling the trigger, as the company’s dividend yield is now topping 6%.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
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