Verizon Sails to the Top of the Dow After Earnings Beat: What to Know
Verizon stock is one of the best Dow Jones stocks Friday after the telecommunications giant beat estimates for its fourth quarter. Here's what you need to know.
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Verizon Communications (VZ) is one the best Dow Jones stocks Friday after the telecommunications giant beat top- and bottom-line expectations for its fourth quarter.
In the three months ending December 31, Verizon said its revenue increased 1.6% year over year to $35.7 billion. Its earnings per share (EPS) rose 1.9% from the year-ago period to $1.10.
Also notable was a 3.1% increase in wireless service revenue to $20 billion, which Verizon says is a result of price hikes and sales perks.
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"With innovations powered by the best network in the country, we are bringing the best experiences to our customers, in life and work," said Verizon CEO Hans Vestberg in a statement. "It's only going to get better this year and beyond, as we have continued to strengthen Verizon with the pending Frontier acquisition, new satellite partnerships, and ongoing AI [artificial intelligence] enablement, which we expect will enhance and broaden our network for everybody we serve."
Verizon's top- and bottom-line results beat analysts' expectations. Wall Street was anticipating revenue of $35.3 billion and earnings of $1.09 per share, according to MSN.
For its new fiscal year, Verizon said it expects to achieve earnings growth of flat to 3%, implying a range of $4.59 to $4.73. The midpoint of this range, $4.66, came in below analysts' expectations for earnings of $4.72 per share.
Is Verizon stock a buy, sell or hold?
Verizon Communications has lagged the broader market over the past 12 months, roughly flat on a total return basis (price change plus dividends) vs the S&P 500's 27.5% gain. But Wall Street remains bullish on the blue chip stock.
According to S&P Global Market Intelligence, the average analyst target price for VZ stock is $47.16, representing implied upside of nearly 20% to current levels. Meanwhile, the consensus recommendation is aBuy.
Financial services firm Argus Research is one of those outfits with a Buy rating on VZ stock, along with a $42 price target.
"Verizon stresses that it looks for profitable growth from high value subscribers and its recent price increases bear that out. Management has improved wireless service revenue growth, adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] expansion, and free cash flow in recent quarters," wrote Argus analyst Joseph Bonner.
He added that the company "continues to benefit from strong customer loyalty and service plan upgrades."
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