What to Expect When Verizon Reports

Verizon Communications Inc. (NYSE: VZ) is scheduled to release its second-quarter financial results before the markets open on Tuesday. The consensus estimates call for $1.14 per share in earnings and $31.75 billion in revenue. The same period of last year reportedly had $0.96 per share and $30.55 billion, respectively.

Recently, at Credit Suisse started Verizon shares with an Outperform rating and a $58 price target. The call noted that its wireless focus is starting to pay dividends for the company, and it implied upside of 13%, before taking Verizon’s 4.6% dividend yield into consideration.

Credit Suisse said of Verizon:

We believe wireless competition has stabilized and wireless revenue is returning to sustainable growth near-term, while Verizon has invested enough in pre-positioning for 5G that this important technology shift in the next few years should, at a minimum, not be a share loss event for Verizon. Furthermore, after two years of deterioration, Verizon’s already industry-leading returns should start to improve again via its major $10 billion cost savings plan, stable capex spending (5G is less expensive than feared and fixed wireless success-based post-trials), record low churn, the benefit of tax reform and abstinence from dilutive M&A. Interestingly, Verizon having remained focused on its core wireless business now meaningfully differentiates it from AT&T as an investment vehicle, and the shift to new, tech-focused CEO Mr. Vestberg suggests to us an even lesser likelihood of media/cable M&A going forward.

In the past 52 weeks, Verizon has performed more or less in line with the broad markets, or up about 14%. In just 2018 alone though, the stock is down 4%.

A few other analysts weighed in on Verizon ahead of the earnings report:

• Goldman Sachs has a Buy rating and a $56 price target.
• Deutsche Bank has a Buy rating with a $49 price target.
• Jefferies has a Hold rating with a $52 target price.
• JPMorgan has an Overweight rating and a $58 target.
• William Blair has a Market Perform rating.

Shares of Verizon were last seen at $50.58, with a consensus analyst price target of $56.00 and a 52-week range of $42.80 to $54.77.

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