When it comes to wireless connectivity, arguably the biggest name in the game right now is Verizon (NYSE:VZ). It's got a massive network, and it's been working frantically to build that network out even farther. Right now, it's working on advancing the latest 5G connection technology, and it's getting some exciting new notice from analysts as well, up 0.6% in pre-market trading.
MoffettNathanson Likes What it Sees
The very latest change to Verizon's outlook comes from MoffettNathanson, who upgraded Verizon both in overall outlook and in price target. The analyst upgraded the company from “neutral” to “buy”, and stepped up the price target from its previous $59 per share to a new $66 per share.
That's a hefty new outlook, one supported by the likelihood of improved average revenue per user figures likely to be seen in 2021. That's especially good news given the earnings report the company rolled out back in October, where it posted $1.25 earnings per share (EPS) figures, which beat consensus estimates from Zacks of $1.22 nicely. Though revenue was down 4.2% against the same time the previous year, there were likely mitigating circumstances to be considered in the form of COVID-19.
An Approximately Shared Standpoint
So MoffettNathanson is showing Verizon some fresh love, but as it turns out, our latest research says that the consensus isn't too far behind MoffettNathanson's viewpoint here. This “trending stock” just recently ticked over to a consensus rating of “buy”, up from a consensus “hold” from just last month, and a consensus that has been climbing steadily for the last six months. Last month, the company had 14 “hold” ratings, seven “buy” ratings, and one “strong buy.” Now, it has just 12 “hold”, nine “buy” and one “strong buy”, which is just enough of a ratio to tick it over into full buy status.
The consensus price target is also back up as well, after falling from $62 to $61.90 in the space between three months and a month ago, the latest consensus target is, once again, $62. MoffettNathanson isn't the only analyst to recently express faith in Verizon's operations, either; JPMorgan Chase, back in early November, bumped up its outlook from “neutral” to “overweight,” and back in mid-September, Oppenheimer rolled out coverage of the company with a full “buy” rating.
Lots to Like in this Major Communications Offering
So we've got a good look at the analyst picture, which is increasingly trending toward buying in. What, however, is Verizon doing to merit such a picture? Quite a bit, actually. The company has been working toward aggressive expansion; just recently, it brought the Morristown, New Jersey town council a plan to bring in 50 “small cell nodes.” These nodes, concealed inside what look like everyday light poles, improve connections for those in the area. They act like Wi-Fi routers, but for cell service, which means clearer calls and faster, better data connections for Verizon customers.
Better yet, the company is also putting its customer service face on. Fios TV customers will be getting a credit for the numerous canceled sporting events that cropped up this year in the face of the pandemic. That's a move that's likely to help keep customers in the Verizon fold and help improve those average revenue per user metrics that MoffettNathanson cited in the first place.
News of operational improvement comes in from all over. The numbers out of Australia and New Zealand will enchant; the company has seen triple-digit growth in some properties out that way. Improvements in the company's search faculties to accommodate the incoming loss of cookies will help things out too.
Basically, Verizon knows it's top of the food chain when it comes to mobile connectivity. It's working to maintain that position, which is especially welcome news for investors. AT&T (NYSE:T) isn't going away any time soon. T-Mobile (NASDAQ:TMUS) is an up-and-comer, breaking into home internet service with a powerful new offering. Given how vital internet connections are these days thanks to a growing everything-from-home philosophy, companies that can produce powerful connections—mobile or otherwise—will be that much more valuable.
Verizon has to make its case sufficiently worthwhile to keep the customers it has, and to try and bring new ones in as well. It's made a lot of solid moves in both directions so far, and if it can keep the momentum alive, it's likely to do well. Sticking with Verizon is sticking with the big name in connectivity worldwide, and should make for a worthwhile addition to your portfolio.
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