Verizon Stock (NYSE:VZ)
The growth in the number of subscriber bases is cited as the primary reason for Oppenheimer’s decision to upgrade Verizon stock to the Outperform rating.
“After nearly two years, we’re going positive on Verizon stock again,” analyst Tim Horan said, reversing a rating the Verizon (NYSE:VZ) filed in February 2021 based on what he claimed was overpaying for spectrum and 5G projects. He stated that this overpayment “led to customer defections, weaker financial sheet, and large capital expenditure.”
According to what he has said recently, “these variables are now reversing, with network quality considerably improving, (fixed wireless) and even cable wholesale revenue growth, price rises, and reduced expenditure permitting robust cash flow that should deliver B/S back to the mid-to-low 2x range.”
According to Horan, Verizon (NYSE:VZ) is making steady progress in catching up to T-Mobile (NASDAQ:TMUS) in terms of the performance and functionality of its 5G network.
Even amid some turbulent near-term trends, the critical driver is the “gradual stabilization-to-growth of its subscriber base.” Strong free cash flow growth of 15% per year (now that Verizon has passed peak investment and debt) should also be encouraging.
After several years of underperformance, he says that now “the price is correct.” Verizon stock has a price multiple of 7.5x 2023 earnings (a “55% discount to the market multiple”) and an attractive 6.6% dividend yield with a “manageable” 50% payment.
He has a price objective of $50, which indicates that Verizon stock has an upside potential of 31%.
Featured Image- Megapixl @ Waingro
Author Shariq Khan 
