Verizon (NYSE:VZ)
The major red carrier, Verizon (NYSE:VZ), will release its quarterly results for the third quarter on Friday before the market opens. As a result, Verizon stock surged in the market.
As T-Mobile (TMUS) continues to grow in popularity, and as the company faces the burden of three consecutive quarterly net reductions in postpaid phone customers, it is in a precarious position. On Thursday, AT&T announced an increase of 708,000 postpaid phone subscribers.
Verizon is anticipated to succeed, with the Street predicting 38,500 net postpaid phone additions out of 348,000 net cellular postpaid adds.
Evercore ISI is one of the cautious investors. A decrease in consumer postpaid phone subscriptions (-175,000, according to the company) will be somewhat offset by gains of about 200,000 in corporate phone subscriptions, analyst Vijay Jayant predicts for Verizon’s upcoming financial reports.
Revenue from wireless services is expected to grow by roughly $400M sequentially due to price hikes being passed on to customers and by around 3% annually, excluding the effect of Verizon’s purchase of TracFone. He is now only predicting an 8 percent increase in value, down from a previous estimate of 14%.
David Barden, an analyst at BofA, concurs that the market’s estimates of Verizon’s attrition are too low. Net additions will slow in Q3 due to “temporarily higher” churn caused by the price increase. Verizon’s “problem is generating momentum and shifting from postpaid phone net losses to positive net additions,” Barden says, even though the Verizon stock should demonstrate improvement in average revenue per customer and gross adds.
MoffettNathanson is negative on the stock, giving it a Sell recommendation. Analyst Craig Moffett argues that Verizon stock is being exposed as a weak link because of T-(TMUS) Mobile’s superior 5G network and AT’s subscriber growth via promotions and that “rate hikes won’t completely balance cost inflation, leaving EBITDA slightly negative and unit growth challenging.”
At $1.29, Verizon’s projected adjusted EPS would be 8.7% lower than in the same period a year before and the lowest since the fourth quarter of 2020.
And sales are expected to total $33.79B, an increase of 2.7% from the same period last year but a hold steady from the second quarter by Verizon stock.
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Can Verizon stock reverse subscriber loss? That’s the question investors will watch in the company’s next earnings report.
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Author Shariq Khan 
