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Verizon Communications (NYSE:VZ) shares were upgraded by Oppenheimer to Outperform with a $50 per share price target on Thursday.
Analysts there said in a memo that the firm is getting constructive on Verizon again as they anticipate a gradual stabilization-to-growth of its subscriber base. They did, however, state that trends could remain volatile.
The upgrade was based “on 1) improving network quality; 2) effective customer segmentation; and 3) successful bundling of its burgeoning fixed wireless access service, an unequivocal hit where we have a variant positive view versus detractors hoping it sells out quickly.”
“Also supportive is expected strong free cash flow growth of 15% per year, as VZ has passed peak investment and leverage. Lastly, the price is right after years of underperformance—7.5x ’23E P/E, 55% discount to the market multiple, with an attractive 6.6% dividend yield, nearly quadruple the S&P, with manageable 50% payout,” stated the analysts.
Elsewhere, Raymond James cut its price target on Verizon, albeit from $55 to $54, maintaining an Outperform rating on the stock.
Analysts told investors: “We maintain our Outperform rating on Verizon ahead of 3Q earnings. With a safe dividend yield and low leverage, we believe investors value its consistently simpler story and longstanding network quality, which we expect to remain a focus of differentiation in the coming quarters.”
