Wall Street’s View of Verizon

Verizon in 1Q16: Challenges on the Road to 5G

(Continued from Prior Part)

Wall Street’s take on Verizon

In the previous part, we looked at some aspects of Verizon’s (VZ) value proposition in the US telecom market. We looked at the carrier’s enterprise value multiples and dividend yields of some major US telecom players: AT&T (T), CenturyLink (CTL), Frontier Communications (FTR), and T-Mobile (TMUS) as of May 19, 2016. Now let’s look at how Wall Street analysts view Verizon.

As you can observe in the above chart, the majority of a set of 36 recommendations by Wall Street analysts for Verizon were “hold” on May 19, 2016. These recommendations represented ~66.7% of the total set.

There were no “sell” recommendations for Verizon’s stock. The remaining ~33.3% of the recommendations on the stock were “buy” recommendations for the same date.

The average target price by Wall Street analysts on Verizon’s (VZ) stock was $52.67 as of May 19, 2016. Verizon’s closing price was $49.63 on that date.

Price performance of Verizon

During the past month, as well as during the past three months, Verizon’s price performance has been in negative territory as of May 19, 2016. In the past three-month period, the company’s stock price has decreased by ~2.4%. Moreover, taking the one-month period into account, the stock price fell by ~4.1% on that date.

Rather than taking direct exposure to Verizon’s stock, you may consider taking a diversified exposure to the company by investing in the SPDR Dow Jones Industrial Average ETF (DIA). Verizon made up ~2% of the ETF at the end of April 2016. Verizon was the only telecom player in DIA.

Browse this series on Market Realist:

• Part 1 - The Road to 5G: Verizon on Its Initial Challenges

• Part 2 - 5G and Verizon’s Upcoming Capital Expenditures

• Part 3 - Verizon Had the Lowest Postpaid Wireless Churn in 1Q16