Morgan Stanley Feels Confident in Verizon Communications Ahead of 2Q14 Reports

In a report published Wednesday, Morgan Stanley analyst Simon Flannery reiterated an Overweight rating and $52.00 price target on

. In the report, Morgan Stanley noted, “During the first quarter, Verizon delivered negative phone net adds, as T-Mobile launched Un-carrier 4.0 in January (to pay early termination fees), and AT&T introduced 10 GB Mobile Share plans for $100 in February. However, Verizon introduced 'MORE Everything' plans in mid-February, responded with similar 10 GB plans in April, and launched XLTE in May. For the second quarter, CEO Lowell McAdam expects to report more than 1.4M postpaid net adds, including positive phone net adds, strong smartphone adds, record tablet adds, and very good postpaid churn. We will be paying close attention to the phone / tablet mix, with Verizon actively promoting tablets in recent quarters (MSe: ~300k phone net adds, 1.1M tablet net adds in 2Q14). However, it seems that Verizon has figured out how (for now) to better defend their base against competitive intensity.” Verizon Communications closed on Tuesday at $50.71.