Argus Weighs In Verizon Communications Inc. Stock
On Tuesday, according to a research note, Argus has maintained a Buy rating on the stock of Verizon Communication Inc. along with $59 target price. The sell side firm noted that during an investor presentation, Mr. Lowell McAdam, Chief Executive of the company announced that 2016 earnings are most likely to remain same with 2015. The company is likely to recommence earnings growth in the year 2017.
While the company keeps on attracting higher value subscribers who depend on Verizon’s network reliability, the sell side firm thinks that low ball advertisement from a rising T-Mobile U.S Inc. and a slightly desperate Sprint Corp. are getting bargain hunters from company’s lower value feature phone and prepaid tiers. The company has reaffirmed that it will preserve its high value post paid subscribers, which is expected to cause discounts as will appear necessary.
Mr. Joseph Bonner, an analyst at Argus increased his FY15 earnings per share forecast to $3.89 from $3.79. He ascribed the increase in forecast to rise in dividends, as Verizon just declared to raise its quarterly dividend to 56 cents by almost 2.7%. However, he reduced his fiscal year earnings per share estimates to $3.9 from $3.93, similar to company’s guidance.
Argus also noted that the company has been a long leader in wireless and currently has become a competitor in cable industry too. With the introduction of its G090 wireless video-service, Verizon is making plan to fascinate millennial “cord-nerves”. As penetration of Smart phones works out, the wireless company appears to boost revenue, earnings and network usage by enhancing internet of things and wireless video.
Verizon Communication is usually away from contracts and device subsidies, and it recently disclosed latest shared data plans wherein 1 gigabyte of data costs around $30 per month, 3 gigabyte costs $45 and 6 and 12 GB costs $60 and $80. These plans required payment of around $20 a month for every smartphone line and nearly $10 a month for each hotspot or tablet.
Verizon earnings per share enhancement from the latest quarter were somewhat positive. The company has likewise volatile earnings lately. On Thursday, the giant telecommunication company said that subscribers on grandfather unlimited data plans, Verizon stopped providing them to fresh users in the year 2011 –might witness a $20 rise in their bill monthly. Users will get the first bill with increment after 15 November, while a small number of unlimited users in agreement will not see the increase until it get expires.
Verizon stock was up 0.89% $44.24 at market close on Thursday.