Market Overview

Verizon's Place As A High-End Provider Could Be In Jeopardy

Share:
Verizon's Place As A High-End Provider Could Be In Jeopardy

Verizon Communications Inc. (NYSE: VZ)'s status as being a premium-priced and higher-end "Tiffany network" is now being called into question after the company's first quarter earnings report.

According to Argus' Joseph Bonner, Verizon's "weak" earnings report showed a decline in both revenue and earnings per share and confirms the intense competitive environment within the wireless industry. In fact, Verizon's move to join its competitors in offering unsubsidized phone plans and unlimited data offerings is hurting its organic revenue and earnings, which prompted the analyst downgrade Verizon's stock from Buy to Hold.

The Path Forward Isn't Bright

Moreover, Verizon's gameplan of monetizing increasing data usage isn't expected to be successful in the current "unlimited data environment." Specifically, the company is looking to monetize content with its go90 platform, alliances with the National Football League, the 2015 acquisition of AOL and the pending acquisition of Yahoo! Inc. (NASDAQ: YHOO).

However, the analyst believes it's "unclear" not only how it can monetize the services but how quickly it can show results. Perhaps more alarming, Verizon's management's silence on go90 suggests the unit "may be underperforming."

With that said, Bonner lowered his 2017 full-year earnings per share estimate from $3.84 to 3.79 while 2018's estimates were lowered from $3.95 to $3.88. The analyst also slashed his long-term earnings growth rate to 4 percent.

See Also:

The Most Compelling Hail Mary For Comcast: Charter

T-Mobile's John Legere + 4/20 = Pot Shots At Verizon

Image Credit: By Anthony92931 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Latest Ratings for VZ

DateFirmActionFromTo
Nov 2019DowngradesBuyHold
Nov 2019DowngradesBuyNeutral
Oct 2019Initiates Coverage OnMarket Perform

View More Analyst Ratings for VZ
View the Latest Analyst Ratings

Posted-In: Argus Joseph Bonner Verizon Verizon EarningsAnalyst Color Downgrades Analyst Ratings Tech Best of Benzinga

 

Related Articles (YHOO + VZ)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
TOLGoldman SachsInitiates Coverage On42.0
KBHGoldman SachsInitiates Coverage On36.0
YEXTSunTrust Robinson HumphreyMaintains28.0
LHCGSunTrust Robinson HumphreyMaintains160.0
DLRSunTrust Robinson HumphreyMaintains140.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

The Complex Is NOT In Alignment Yet

A Peek Into The Markets: U.S. Stock Futures Edge Higher; GE Profit Beats Views