Market Overview

Verizon Shifting Into Execution Mode: Barclays Looking For Evidence Of Benefits To Its Strategy


Meeting with Verizon Communications Inc’s (NYSE: VZ) CFO Fran Shammo highlighted the company's “steady focus on its multi-year dual play strategy,” Barclays’ Amir Rozwadowski said in a report. The analyst expects Verizon to shift from transition mode to execution mode heading into 2017.

There are concerns surrounding intensifying competition. Despite this, Verizon continues to focus on its multi-year dual play strategy - “a targeted expansion of its addressable market (MediaCo, IoT) and a consistent focus on efficiently improving network quality (5G, fiber),” analyst Rozwadowski wrote.

Focus On Network Quality

Although T-Mobile US Inc (NASDAQ: TMUS) and Sprint Corp (NYSE: S) have announced new unlimited plans, Verizon continues to focus on network quality believing this will help the company remain differentiated, particularly among its prime subscriber base.

Network Investment Unlikely To Be Lowered

Verizon continues to give significance to consistent network investments, since 5G leadership is a core part of its overall strategy.

“The company does expect savings from various "softwareification" initiatives (i.e. SDN, NFV, C-RAN, etc.). However, rather than reducing capital intensity, the company expects to put those savings to work in driving densification and fiber deployments to augment current network capacity and create the foundation for an efficient migration to 5G,” Rozwadowski mentioned.

The analyst maintained an Equal Weight rating on Verizon, with a price target of $52, commenting that as the company shifts from transition to execution mode, “we look for further evidence of the financial benefits of its strategy to build throughout 2017.”

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Latest Ratings for VZ

Sep 2020Argus ResearchUpgradesHoldBuy
Jul 2020UBSMaintainsNeutral
Jul 2020ScotiaBankMaintainsSector Outperform

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