Why This Verizon Communications Analyst Is Turning Bullish

Shares of Verizon Communications Inc. VZ Thursday reversed a downward trend in place since the beginning of this week.

While the stock is trading at a historically attractive valuation, the company has room to improve its operational performance in 2023, according to Morgan Stanley.

The Verizon Communications Analyst: Simon Flannery upgraded Verizon Communications from Equal-Weight to Overweight while raising the price target from $41 to $44.

The Verizon Communications Takeaways: While the stock valuation reflects “an overly negative relative outlook,” there are signs of trends gradually improving, Flannery said in the upgrade note.

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“We think its asset mix should prove defensive in a slowing macro environment given the essential nature of the services and the recurring revenue model,” the analyst said. 

“Verizon’s wireless trends are showing some signs of improvement with a recent recovery in gross add momentum and the benefits of targeted price increases, while pricing-driven churn should moderate,” he added.

The company’s free cash flows are likely to ramp as “5G capex program winds down,” Flannery said. 

VZ Action: Shares of Verizon Communications had risen by 1.42% to $37.98 Thursday morning. 

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