Verizon Communications Inc. or simply Verizon, the telecommunications company, is touted by many analysts and stock commentators as a potential beneficiary from the coronavirus disease COVD-19 crisis or at least a stock which will lose relatively less market capitalization in the current environment.
Verizon stock price is down circa 11% since the beginning of 2020, which compares favorably with 30%, 33% and 24% declines year to date of respectively the S&P 500, DJIA and Nasdaq Composite.
Here I am going to attempt to value Verizon in the current economic crisis we are in caused by the coronavirus disease COVD-19.
First, why the outperformance? Simply, because Verizon supplies internet and now almost everybody works and studies remotely vie internet video and chat services like Skype, Hangouts, Messenger, Slack, Facetime, Teams etc. Cloud and virtual machines prove very useful in this environment.
How low could the price of Verizon stock go? I estimate Verizon's intrinsic value today is worth around 150 billion USD which translates in Verizon stock price of around 37 USD. I believe Verizon's stock price will fall less than the major US indices S&P 500, DJIA and Nasdaq Composite, which could lose 60%, 50% and 70% of their value from the recent historic highs.
Why? Because the demand for Verizon's main services - telecommunications and internet currently is extremely inelastic. Firms and people simply must be on the internet to inform themselves, work and ultimately survive now.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
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