Verizon Communications Inc. Shares Fall As Competition Grows

Verizon Communications Inc. Shares Fall As Competition Grows

By Carly Forster

Play Quizzes 4

Verizon Communications Inc. (NYSE:VZ) shares significantly dropped in trading on Tuesday after the company revealed strong customer growth and the roll out of 4G devices, but at the cost of a “highly competitive and promotion-filled” fourth quarter. As a result, the high number of consumers taking advantage of its deals may add pressure to its wireless business’s EPS and EBIDTA in the near-term.

The company also revealed that more of its current customers have cancelled their services in favor of other competitors this quarter than in the quarter prior or the same quarter last year due to heavy promotions from rivals.

Morningstar Investment Conference: Fund Manager Highlights Personalized Medicine, Energy Security

Clint Carlson Far ViewHedge fund managers go about finding investment ideas in a variety of different ways. Some target stocks with low multiples, while others look for growth names, and still others combine growth and value when looking for ideas. Some active fund managers use themes to look for ideas, and Owen Fitzpatrick of Aristotle Atlantic Partners is Read More

Due to its strong reputation and network, Verizon has been able charge consumers a premium for its wireless service for a long time. However, deals and discounts from its competitors are starting to have a negative impact on the company.

On December 9th, Citigroup analyst Michael Rollins reiterated a Neutral rating on Verizon and lowered his 2014 and 2015 EPS estimates following the company’s announcement. He noted, “the national U.S. wireless carriers now face unfavorable conditions in 2015 relating to slower industry revenue growth, higher capacity costs, and a tougher regulatory backdrop, while they incubate different strategies to create a path to long-term revenue growth.”

Rollins currently has a 63% success rate recommending stocks with a +12.5% average return per recommendation. He has rated Verizon 6 times with 60% success.

Robert W. Baird analyst William Power also cut his rating for Verizon Communications Inc. (NYSE:VZ) from Outperform to Neutral on December 9th. Power fears that Verizon is taking more of a hit from competitors than in the past.

Power currently has a 62% success rate recommending stocks with a +9.6% average return per recommendation. He has rated Verizon 4 times with a +8.9% average return per recommendation.

Will Verizon overcome this hurdle and come out ahead, or is the competition too much to handle?

On average, the top analyst consensus for Verizon is Hold.

To see more recommendations for Verizon Communications Inc. (NYSE:VZ), visit TipRanks today!

Carly Forster writes about stock market news. She can be reached at

Updated on

TipRanks was founded in 2012 with the goal of giving power back to the individual investor. Our hope is that by making analyst performance data easily available and highly visible to the investing public, TipRanks will not just help save others from our investing mistakes, but will also bring back accountability, objectivity, and transparency to the business of stock picking and analyst reports. TipRanks is proudly unaffiliated with any investment firm.
Previous article John Rogers’ Ariel Investments November Commentary
Next article The Best Tweets on Crude Oil’s Big Crash

No posts to display