Verizon Q4 Shows Consumer Turnaround Continues - BofA Analyst Eyes Wireless Growth in 2024 Financial Forecast

BofA analyst David W. Barden maintained a Neutral rating on Verizon Communications Inc VZ and a price target of $41 as the Consumer turnaround continues.

The analyst noted that the telecommunications conglomerate reported financial results that were generally in line with expectations and better than expected post-paid phone net additions. 

Wireless post-paid phone net adds of 449k beat Barden’s estimate of 260k and the Street’s 239k. “We maintain our Neutral rating,” the analyst wrote in the note.

Verizon shared 2024 financial guidance. It sees wireless service revenue growth of 2.0% – 3.5% year-on-year (vs. BofA’s 3.3%, Street’s 2.7%), adjusted EBITDA growth of 1.0% – 3.0% (BofA’s 1.1%, Street’s 1.9%), adjusted EPS of $4.50 – $4.70 (BofA and the Street’s $4.58) and capex of $17.0 billion – $17.5 billion (BofA’s $17.6 billion, Street’s $17.4 billion). 

Barden expects Verizon to discuss the main free cash flow puts and takes it sees in 2024. 

The analyst said that cash taxes and interest costs will be headwinds while lower Capex will be a tailwind.

Barden expects Verizon to share the wireless market growth outlook it used to shape the 2024 guide. 

Below the line, he will look for VZ to discuss its outlook for interest expense, taxes, and depreciation in 2024. 

The analyst expects to hear an update on Verizon’s FWA business outlook and the planned balance between subscriber growth and pricing.

Price action: VZ shares closed higher by 6.70% at $42.43 on Tuesday.

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