Maintaining Hold: A Balanced View on Verizon’s Steady Performance and Dividend Appeal

Verizon (VZ – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst David Barden from Bank of America Securities maintained a Hold rating on the stock and has a $41.00 price target.

David Barden has given his Hold rating due to a combination of factors that suggest a stable but not necessarily compelling investment case for Verizon at the current moment. Barden anticipates a steady progression in the Consumer segment and expects the company to reaffirm its full-year 2024 guidance covering critical financial metrics such as service revenue growth, adjusted EBITDA, and free cash flow. His projections include a slight decline in Consumer post-paid phone net additions and a modest increase in Business phone net additions, with Verizon benefiting from investments in its Consumer platform but facing headwinds in the Business segment due to recent price increases and a seasonal dip in public sector spending.

Barden’s neutral stance is further supported by the attractive dividend yield Verizon offers amidst the absence of significant catalysts that might drive the stock price substantially higher in the near term. During the upcoming earnings call, he is particularly interested in gaining insights into the drivers of the 2024 free cash flow, including the effects of cash taxes, interest expenses, and working capital changes. Other areas of focus will be the conclusion of the Affordable Connectivity Program and its potential impact, as well as the company’s outlook on the continued success of its fixed wireless offerings.

Based on the recent corporate insider activity of 43 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of VZ in relation to earlier this year.

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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.