Analysts Call Verizon Stock a ‘Hold’ after Its Mixed Q4 Earnings



Analysts’ recommendations

Of the 30 analysts covering Verizon (VZ), 12 have given the stock “buy” ratings, while 18 have rated it as a “hold.” No analysts have given the stock “sell” ratings. Analysts have set a target price of $59.18 on the stock with a median consensus estimate of $59.00. Verizon is now trading at a 9.7% discount to its consensus median target estimate.

Cowen and Company slashed its price target on Verizon stock to $58 from $59 after the company reported lower-than-expected revenue in the fourth quarter. The company doesn’t foresee any growth in its 2019 profit, which is denting investors’ confidence in its performance.

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Verizon’s performance

Verizon has been consistently focusing on growing its postpaid phone subscribers, maintaining its churn rate, and improving its network to add more customers by offering various unlimited usage plans and adding other perks, such as free TV streaming. However, its loss of video customers has remained a headwind for the past several quarters.

Meanwhile, Verizon doesn’t expect its profits to increase in 2019, possibly because the company is investing aggressively in its next-generation 5G network this year. The company already launched its 5G Home Internet service in October 2018, and it’s on track to expand its 5G offerings in the near term.

Market cap of mobile network providers

On January 29, 2019, Verizon’s market cap was ~$220.2 billion, making it the second-largest US wireless service provider by market cap after AT&T (T) with its market cap of ~$223.4 billion.

In comparison, Sprint (S) had a market cap of ~$24.6 billion, while T-Mobile (TMUS) and Frontier (FTR) had market caps of ~$57.5 billion and ~$34.8 billion, respectively.


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