Scotiabank rates Verizon stock as Sector Perform, sees improvement By Investing.com

On Wednesday, Scotiabank updated its forecasts for Verizon Communications (NYSE:) raising its price target on the stock to $46.50 from its previous target of $45.50. The firm maintained a Sector Perform rating on the stock, indicating a Neutral outlook on the stock’s near-term performance.

The Scotiabank analyst believes Verizon’s financial results will improve for the rest of the year, driven by positive wireless subscriber trends and pricing strategies. Additionally, a smaller decline in the business segment is expected to help the company’s financial health.

Verizon indicated that its recent changes to its approach to the consumer wireless market are paying off, and expectations for further year-over-year improvements are high. While it still expects a decline in consumer postpaid subscribers, forecasting -38K, a significant improvement from the prior year’s -136K. The analyst predicts a turnaround toward positive postpaid subscriber growth in the third and fourth quarters.

Reducing customer churn is considered key for Verizon to decisively shift subscriber growth onto a positive trajectory. Despite recent plan price hikes, the impact on churn is expected to be minimal, as competitors have also raised prices around the same time period.

In other recent news, Verizon Communications has been the subject of several important developments. Goldman Sachs initiated coverage of Verizon, highlighting the company’s potential growth through the deployment of fixed wireless in the consumer and business sectors. The company also indicated a positive outlook for Verizon’s revenue and EBITDA growth, as well as the potential for increased capital returns and buyouts.

As part of its board appointments, Verizon announced the addition of Caroline A. Litchfield, currently executive vice president and chief financial officer of Merck & Co., Inc., effective October 1, 2024. Meanwhile, Federal Communications Commission Chairwoman Jessica Rosenworcel has required major telecommunications companies, including Verizon, to disclose their strategies for combating fraudulent AI-generated political phone calls.

Telecommunications industry groups, including Verizon, are legally challenging the Biden administration’s rollback of net neutrality rules. In an analyst note, Citi maintained a Buy rating on Verizon while subtly adjusting its forecast for Verizon’s SecondNumber feature. Verizon also included Comcast Corporation’s (NASDAQ:) Peacock service in its +play streaming subscription service and offered a discounted YouTube Premium subscription to its myPlan subscribers. Here’s the latest from Verizon Communications.

InvestingPro Insights

According to the latest data from InvestingPro, Verizon Communications (NYSE:VZ) remains in a solid position with a market capitalization of $173.84 billion and a price-to-earnings (P/E) ratio of 15.47, which further adjusts to a lower level of 10.02 when looking at the trailing twelve months from Q1 2024. This adjusted P/E ratio suggests a more favorable valuation compared to the standard P/E ratio. Additionally, Verizon’s consistent dividend payouts, with a current dividend yield of 6.55%, underscore the company’s commitment to returning value to shareholders — a fact that is further underscored by the company’s history of raising its dividend for 19 consecutive years.

InvestingPro’s advice reveals that Verizon is a major player in the Diversified Telecommunication Services industry and is known for its low price volatility. Furthermore, the company is trading close to its 52-week high, with the price being 95.12% of that peak, reflecting potentially strong investor confidence. For those interested in deeper analysis and additional insights, InvestingPro offers more Verizon tips that can be accessed using coupon code PRONEWS24 up to 10% off a 1-year Pro subscription and a 1- or 2-year Pro+ subscription. With 11 additional tips from InvestingPro, investors can gain a comprehensive understanding of Verizon’s financial health and market position.

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