Verizon stock gets a Buy rating, price target raised to $51 By Investing.com

On Monday, TD Cowen maintained his positive stance on the matter Verizon Communications (NYSE:), raising its price target from $48 to $51 while maintaining a Buy rating on the stock. The company’s decision comes after Verizon posted mixed financial results that included strong phone customer additions and better-than-expected fixed wireless access (FWA) additions. The company also met free cash flow (FCF) expectations, albeit on lower capital expenditures, and reaffirmed its financial guidance for the year.

Verizon shares fell 6%, which the company attributed to a combination of factors. They included a decline in second-line add-ons, suggesting weaker results in real consumer phone growth, as well as significant losses in the Affordable Connectivity Program (ACP) and lower FCF due to lower capital expenditures.

Verizon management downplayed the potential impact of any major AI-powered iPhone releases in the second half of the year on the company’s results. Despite the current challenges, the company noted that prospects for a consumer market rebound and free cash flow growth through 2025 remain likely, albeit to a somewhat lesser extent than previously anticipated.

The telecom giant’s restatement of its financial guidance for the year suggests a level of stability and confidence in its operating strategy. Verizon’s focus on retaining its customer base and growing key businesses like FWA services is evident in its latest financial disclosures.

In other recent news, Verizon Communications saw a number of changes. Deutsche Bank maintained a Hold rating on Verizon, with a $44.00 price target, based on projected changes in the company’s earnings and the impact of AI improvements. Meanwhile, Scotiabank updated its outlook, maintaining a Sector Perform rating and raising the price target to $46.50, based on positive wireless subscriber trends and pricing strategies.

Goldman Sachs initiated coverage of Verizon with a Buy rating and a $50.00 price target, highlighting the potential upside from the adoption of fixed wireless connectivity in the consumer and business sectors. In 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.

On the regulatory front, Federal Communications Commission Chairwoman Jessica Rosenworcel has asked Verizon, along with other major telecom companies, to disclose their strategies against fraudulent, AI-generated political robocalls. Telecom industry groups, including Verizon, are legally challenging the Biden administration’s reinstatement of net neutrality rules.

Finally, Verizon expanded its service offerings by incorporating Comcast Corporation’s (NASDAQ:) Peacock service into its +play streaming subscription hub and offering myPlan subscribers a discounted YouTube Premium subscription.

InvestingPro Insights

As Verizon Communications (NYSE:VZ) continues to navigate the telecommunications industry with a strategic focus on customer retention and growth in its wireless access (FWA) business, insights from InvestingPro provide deeper insight into the company’s financial health and market position. With a market capitalization of $164.41 billion and a price-to-earnings (P/E) ratio of 9.48 based on the trailing twelve months through Q1 2024, Verizon presents a value-oriented investment profile. The company’s commitment to shareholder returns is evident in its impressive track record of maintaining dividend payments for 41 consecutive years, coupled with a high dividend yield of 6.39% as of mid-2024.

InvestingPro’s advice also highlights Verizon’s status as a leading player in the diversified telecommunications industry, with low price volatility that could appeal to risk-averse investors. Additionally, analysts predict the company will remain profitable this year, supporting the company’s positive outlook. For those looking to delve deeper into Verizon’s investment potential, InvestingPro offers additional advice, including information on the company’s shareholder yield and dividend growth history. To view these and other tips, investors can visit https://www.investing.com/pro/VZ and use coupon code PRONEWS24 to get up to 10% off an annual Pro subscription and an annual or two-year Pro+ subscription, unlocking access to a comprehensive suite of investing tools and data.

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