Verizon Communications (NYSE: VZ) Receives Price Target Upgrade to $49 by Citi - Strong Q3 Results Expected
Citi has upgraded its price target for shares of Verizon Communications to $49.00, up from $47.00, while maintaining a Buy rating on the stock. The firm predicts robust third-quarter financial results and key performance indicators (KPIs) from Verizon, signaling progress towards annual targets.
Verizon is expected to see an increase in postpaid phone volumes, with a projected growth of approximately 230,000 subscribers, including 65,000 from its SecondNumber service. The company is also anticipated to achieve a 1.8% year-over-year service revenue growth and a 1.5% year-over-year EBITDA growth, surpassing consensus estimates.
Citi's analysis includes adjustments to Verizon’s model, considering factors like reduced consumer upgrade rates and workforce reduction charges. Looking ahead to 2025, Citi suggests Verizon may outperform consensus estimates on service revenue and EBITDA growth, driven by efforts to enhance average revenue per user (ARPU) monetization.
In conclusion, Citi maintains a positive outlook on Verizon's stock, with a revised price target of $49 reflecting confidence in the company's financial trajectory. Recent financial performance, such as the Q2 2024 results, and news of a potential merger with Frontier Communications, further highlight Verizon's position in the market.
InvestingPro Insights:
Verizon Communications holds a market cap of $187.79 billion and a P/E ratio of 16.68, indicating fair valuation. The company's history of dividend growth and stability, along with a dividend yield of 6.07%, makes it an attractive option for income-seeking investors. Analysts remain optimistic about Verizon's profitability and InvestingPro offers additional tips and insights for potential investors.
In summary, Verizon's strong performance, strategic initiatives, and potential merger opportunities make it a compelling investment choice for those looking for stability, growth, and income in the telecommunications sector.