Wireless company Verizon is set to report its Q1 2024 results, with estimated revenues of $33.3 billion and earnings of $1.13 per share. Some factors likely to drive Verizon’s results include improvements in 5G coverage, acquisitions of C-band spectrum, and the myPlan program offering additional features to mobile phone plans. Verizon is also seeing growth in fixed wireless broadband, adding 375,000 connections in the last quarter. These initiatives are expected to drive incremental services revenue growth for the company.
Despite these positive trends, Verizon’s stock has underperformed the S&P 500, with a 35% decline over a 3-year period. Returns for the stock were negative in 2021, 2022, and 2023, whereas the S&P 500 saw positive returns over the same period. The Trefis High Quality Portfolio, consisting of 30 stocks, has consistently outperformed the market during this time. With uncertainties in the macroeconomic environment, including high oil prices and elevated interest rates, the question remains whether Verizon will continue to underperform or see a recovery in the coming months.
Analysts remain marginally positive on Verizon stock, with a price estimate of $43, in line with the current market price. The stock is trading at about 9x consensus 2024 earnings and offers a forward dividend yield of over 6%. Although there may not be a significant revenue upside, Verizon’s expanding 5G coverage is expected to attract more subscribers and allow for the upselling of superior plans to its massive retail wireless base. Investors are advised to consider these factors when evaluating Verizon’s valuation and comparing it to peers.
Overall, Verizon’s initiatives in 5G coverage, acquisitions of C-band spectrum, the myPlan program, and growth in fixed wireless broadband are expected to drive the company’s Q1 2024 results. Despite underperformance in the stock market, analysts remain cautiously optimistic about Verizon’s prospects, citing its growing 5G coverage and potential for upselling to its large subscriber base. Investors are encouraged to closely monitor Verizon’s upcoming earnings report and consider factors such as valuation, performance relative to peers, and market conditions when making investment decisions.
