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Verizon Shares Lower Amid Oppenheimer Downgrade On Valuation

Verizon Shares Lower Amid Oppenheimer Downgrade On Valuation
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Citing the stock valuation of Verizon Communications Inc. (NYSE: VZ) and near-term challenges like wireless auctions and FCC headwinds, Oppenheimer’s Timothy Horan downgraded the rating on the company to Perform.

While expressing optimism regarding Verizon’s long-term wireless and fiber fundamentals, analyst Timothy c noted that the shares were already trading $2 above the prior price target and at “relative highs on several metrics.” He added that although Verizon is well-positioned in wireless and fiber, there were near-term challenges that had “historically hurt the stock.”

Related Link: Former Yahoo CEO Says Verizon/AOL Is A "Perfect Fit"

Near-Term Challenges

The company suffered a 45-day wireline strike in the quarter. Although the new contract will likely be positive financially in the long term, “it did hurt broadband, video and likely wireless subscribers in the quarter” and wireline margins were also impacted, Horan stated.

Verizon's interest in the assets of Yahoo! Inc. (NASDAQ: YHOO), especially the broadcast incentive auction, a change in FCC leadership and the two-year iPhone refresh have historically exerted pressure on wireless stocks. “We see less fundamental impact from these issues than the Street but the noise level will be high,” the analyst wrote.

The performance Verizon's shares is likely to be dependent on the trajectory of 2017 estimates, Horan added.

Ratings data available on Benzinga Pro.

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Latest Ratings for VZ

Oct 2017Bank of AmericaMaintainsBuy
Apr 2017ArgusDowngradesBuyHold
Apr 2017SunTrust Robinson HumphreyInitiates Coverage OnHold

View More Analyst Ratings for VZ
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Posted-In: Oppenheimer Timothy HoranAnalyst Color Downgrades Analyst Ratings Best of Benzinga


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