UPDATE: Citigroup Reiterates Neutral Rating, Raises PT on Verizon Communications

In a report published Wednesday, Citigroup reiterated its Neutral rating on Verizon Communications

, and slightly raised its price target from $45.00 to $46.00. Citigroup noted, “We now expect Verizon Wireless to add 2 million postpaid net adds (vs. our prior estimate of 1.2 million), as we believe the company is gaining share of users/accounts and gaining some momentum with postpaid connected device sales. We are lowering our 4Q OIBDA margin expectation to around 43.8% from our prior estimate of 46.7% largely based on the stronger sales volumes that we now expect during 4Q. We also believe Verizon's mix of Smartphone sales is shifting in favor of Apple given it's the first full-quarter of Verizon offering all three pricing tiers of iPhones (with the 4/4S/5 lineup). We view the sales volume favorably for Verizon, but have adjusted our EPS estimates for 4Q from 61 cents to 53 cents largely based on the changes to wireless volume and adjusting our wireline margin for sequentially flat performance before factoring in potential dilution from Superstorm Sandy. We also increased our volume expectations for 2013 to reflect stronger postpaid connected device sales during 2013, especially during 4Q/13, which contributed to our downward EPS revision for 2013 from $2.86 to $2.76. Net-net, wireless results remain strong for Verizon and continue to outperform industry revenue growth, while we believe the company retains an opportunity to more aggressively improve wireline costs and margins over the next few years that could be a catalyst for further upside in the share price.” Verizon Communications closed on Tuesday at $43.87.