Verizon Hold Rating Maintained Amid Consumer Segment Growth and Competitive Challenges

Sebastiano Petti, an analyst from J.P. Morgan, maintained the Hold rating on Verizon (VZ – Research Report). The associated price target remains the same with $46.00.

Sebastiano Petti has given his Hold rating due to a combination of factors impacting Verizon’s performance and prospects. While he notes that Verizon’s consumer postpaid phone segment is showing signs of improvement, with better gross additions and lower churn rates, the business segment still presents challenges, acting as a drag on the company’s overall financial performance. Petti also acknowledges that the consumer ARPA (average revenue per account) is growing and is expected to provide a tailwind to EBITDA throughout the year, which is a positive indicator for the company’s consumer segment. However, he tempers this with the caveat that investment is needed for growth in the latter half of the year, which may affect margins.
Petti’s report also reflects a cautious outlook on the potential for Verizon’s stock price appreciation. He maintains a neutral stance, setting a price target that suggests a modest valuation multiple compared to current levels. The report indicates that while there are encouraging signs in Verizon’s improving consumer trends, competitors like T-Mobile offer better growth prospects, and AT&T trades at a more attractive valuation multiple. Petti’s Hold rating implies that he sees limited upside potential for Verizon’s stock at this time, given the mixed financial outlook and the competitive landscape.

In another report released yesterday, Wells Fargo also maintained a Hold rating on the stock with a $40.00 price target.

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Verizon (VZ) Company Description:

Verizon Communications, Inc. provides wireless and wireline communications services and products through its two segments: Verizon Consumer Group and Verizon Business Group. The Verizon Business segment also offers video and data services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various Internet of Things (IoT) services and products. The company was founded in 1983 and is headquartered in New York, NY.