Market Overview

Barclays: Verizon A Buy Despite DOJ Probe

Share:
Barclays: Verizon A Buy Despite DOJ Probe

Despite the threat of a Justice Department investigation that crippled shares Friday, Verizon Communications Inc. (NYSE: VZ) caught a fresh Buy rating Monday from an analyst who’s been on the sidelines since 2015.

The Analyst 

Barclays analyst Amir Rozwadowski upgraded the stock from Equal Weight to Overweight and maintained a $56 price target.

The Thesis

By Barclays’ assessment, Verizon’s historically low valuation does not reflect the firm’s multiple opportunities to improve fundamentals, including service revenue recovery.

“Moreover, its cash generation capabilities, dividend coverage and ability to de-lever are all on sustainably better footing,” Rozwadowski said in a note. (See the analyst's track record here.) 

“While we expect Verizon’s capital intensity to increase beginning next year, the company has made a credible case that a multi-use architecture improves return characteristics for every dollar invested.”

Verizon’s long-term performance has been stunted by uncertainty around competition and margin trajectory, acquisition and investment strategy and the firm’s capacity to grow service revenue.

“We expect the latter to improve in the second half of 2018 [and] consider the company relatively better-positioned in dealing with cable competition, on pace to at least hold margins via cost reductions and don’t anticipate any transformative deals on the horizon,” Rozwadowski said. 

Price Action

Verizon shares were trading up 1.17 percent at the time of publication Monday. 

Related Links:

Sprint, T-Mobile Reportedly Revive Merger Talks

Analysis: Government 5G Network Unlikely, Despite Reports

Photo courtesy of Verizon. 

Latest Ratings for VZ

DateFirmActionFromTo
Nov 2020Wells FargoReinstatesEqual-Weight
Nov 2020JP MorganUpgradesNeutralOverweight
Oct 2020Wolfe ResearchInitiates Coverage OnPeer Perform

View More Analyst Ratings for VZ
View the Latest Analyst Ratings

 

Related Articles (VZ)

View Comments and Join the Discussion!

Posted-In: Amir Rozwadowski BarclaysAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
OCXBTIGInitiates Coverage On5.0
GCMGWilliam BlairInitiates Coverage On
PDCraig-HallumInitiates Coverage On41.0
CAPLWells FargoDowngrades
MMPWells FargoDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
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