UPDATE: Bank of America Reiterates $50 PO and Neutral Rating on Verizon on Potential Merger

In a report published by Bank of America, analyst David W. Barden reiterated his Neutral rating and $50 price objective on Verizon

Bank of America reported that, “The market environment is supportive of a potential merger, in our view: 1) VZ's equity valuation (PE of 17.4x, proportional FCF yield of 6.3%) is at historic highs, interest rates are low, (VZ's most recent funding cost was 2.45%), the dollar is strong (current dollar/pound rate is 1.49 USD/GBP vs. 3 year average of 1.57 USD/GPB), and there is market cap parity between the two names (a VZ to VOD ratio of 1:1.0 vs. 3 year average of 1:1.2). Mathematically, it would be accretive for consolidated VZ to assume control of VZW within a band of reasonable valuations either by buying it directly (best case) or buying all of Vodafone.” Shares of Verizon closed at $47.94 on Thursday.