Despite the fact that Verizon Communications Inc. (NYSE:VZ) shares have just come off their worst quarterly performance in the past two decades, one analyst believes the company’s name warrants a second look.
Verizon Stock Analysis
Even though he sees the possibility for “volatile” near-term trends, Oppenheimer analyst Timothy Horan raised Verizon stock, to outperform from neutral late Wednesday. He wrote of his hope for a “gradual stabilization-to-growth” of the Verizon (NYSE:VZ) subscriber base.
In February of 2021, Horan announced that he had downgraded the shares of Verizon “because the business overpaid for spectrum and [was] late to mid-band 5G deployments, which resulted in customer defections, worse financial sheet, and large CapEx investment.” But now he sees a “reversal” occurring in such regions as Verizon works to enhance the quality of its network and benefits from variables such as price increases and fixed-wireless access.
Horan stated that T-Mobile US Inc.’s, strong 5G posture has received a lot of attention from analysts but that Verizon appears to be “gradually catching up to TMUS in terms of 5G network performance and capabilities.”
In addition, the corporation is working on a number of fronts to increase the number of customers who subscribe to its services. Verizon has just recently introduced two new unlimited plans: the Apple One Unlimited plan and the Welcome Unlimited plan. The Welcome Unlimited plan is designed to entice people to switch their existing phones over to Verizon, while the Apple One Unlimited plan bundles together a variety of Apple services, including gaming, music, and more.
“after a slow 2022,” according to what Horan stated, he anticipates that the number of phone net additions would rebound to 600,000 in the fiscal year 2023.
The CEO of Verizon has stated that the company would not “waste away money” in an effort to win over customers by offering cheaper phones.
According to the article that Horan authored, Verizon is also offering fixed-wireless connectivity “for $25 a month when paired with premium plans, a tempting option to pricey cable broadband.” Internet connectivity for homes is being provided by several carriers by making use of their existing wireless networks in the form of fixed-wireless access.
Now that Verizon (Verizon stock) has gone through the peaks for investment and leverage, he is optimistic about the company’s prospects for “high free-cash-flow growth of 15% per year.” In addition, he loves the firm because it has a “attractive” dividend yield of 6.6%, which he says is roughly triple what the S&P 500 SPX, -0.20% yields. He thinks this is a good sign for the company’s future.
You won’t want to miss this: Verizon (NYSE:VZ) hasn’t exactly been a defensive stock as of late, but here’s how things may turn around for the better:
The price of a share in Verizon dropped by 25% so far in 2018, while the price of a share in the S&P 500 has down by 21% and the price of a share in the Dow Jones Industrial Average has dropped by 17%.
Featured Image- Megapixl @ Waingro
Author Marianna Vilchez 
