{"id":60593,"date":"2023-09-13T16:19:29","date_gmt":"2023-09-13T20:19:29","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/will-verizon-stock-recover-to-its-pre-inflation-shock-highs\/"},"modified":"2023-09-13T16:19:33","modified_gmt":"2023-09-13T20:19:33","slug":"will-verizon-stock-recover-to-its-pre-inflation-shock-highs","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=60593","title":{"rendered":"Will Verizon Stock Recover To Its Pre-Inflation Shock Highs?"},"content":{"rendered":"
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Verizon stock<\/strong> currently trades at $34 per share, 43% below the levels seen on May 10, 2021 (pre-inflation shock high). Verizon saw its stock trading at around $51 at the end of June 2022, just before the Fed started increasing rates, and has lost about 33% since. In comparison, the S&P 500 gained 18% during this period. Verizon is being impacted by slower growth in the wireless phone space following the easing of Covid-19, while competition has also been mounting with carriers doling out aggressive promotions to add customers. Separately, rising interest rates have also likely made dividend stocks, such as Verizon, a bit less attractive to investors, while also making highly leveraged companies a bit more risky.<\/p>\n

Interestingly, Verizon stock has had a Sharpe Ratio of -0.3<\/strong> since early 2017, well below the 0.6<\/strong> for the S&P 500 Index over the same period. This also falls short of the Sharpe of 1.3<\/strong> for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.<\/p>\n

Now, returning to the pre-inflation shock level would mean that Verizon stock will have to gain 75% from here. However, we estimate Verizon\u2019s valuation<\/strong> to be around $41 per share, about 22% ahead of the current market price. While we believe Verizon can expand its earnings, driven by more premium plans and the winding down of its expensive 5G build-out, the stock could see some headwinds due to economic uncertainties. Our detailed analysis of Verizon\u2019s upside post-inflation shock<\/strong> captures trends in the company\u2019s stock during the turbulent market conditions seen over 2022. It compares these trends to the stock\u2019s performance during the 2008 recession.<\/p>\n

2022 Inflation Shock<\/strong><\/p>\n

Timeline of Inflation Shock So Far:<\/p>\n

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