New York-based Verizon Communications Inc. (VZ) provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities. Valued at $171.95 billion by market cap, VZ is the largest telecommunications company in the U.S. that provides wire line voice, data services, wireless, and internet services.
Shares of this telecommunication giant have outperformed the broader market considerably over the past year. VZ has gained 25.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 19.1%. In 2024, VZ’s stock has gained 10.7%, lagging SPX’s 12.7% rise on a YTD basis.
Narrowing the focus, VZ’s gains over the past 52 weeks are easily overshadowed by the S&P 500 Communication Sector SPDR (XLC). The exchange-traded fund has gained about 27.2% over the past year. The ETF’s 18% returns on a YTD basis outshine the stock’s gains over the same time frame.
On Jul. 22, VZ shares closed down more than 6% after reporting Q2 revenue of $32.80 billion, below Wall Street forecasts of $33.05 billion. Its adjusted EPS of $1.15 was in line with Wall Street expectations. Its wireless service revenue rose 3.5% from a year-ago quarter to $19.80 billion. The company’s fixed wireless revenue stood at $514 million, up more than $200 million year over year.
Also, VZ announced that it ended Q2 with 11.50 million broadband subscribers, a 17% increase from a year earlier. The company maintained its full-year financial guidance and expects its total wireless service revenue to grow 2% to 3.5%, and expects its adjusted EPS to be between $4.50 and $4.70.
For the current fiscal year, ending in December, analysts expect VZ’s EPS to decline 2.8% to $4.58 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 22 analysts covering VZ stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, three “Moderate Buys,” and 12 “Holds.”
This configuration is slightly more bullish than three months ago, with six suggesting a “Strong Buy.”
Recently, TD Cowen analyst maintained a “Buy” rating on VZ stock and raised the price target to $51 from $48, implying a potential upside of 24.8% from current levels.
The mean price target of $45.71 represents an 11.9% premium to VZ’s current price levels. The Street-high price target of $53 suggests an upside potential of 29.7%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
