JP Morgan upgrades Verizon, says hefty dividend and 5G plans will boost shares | Financial Times

JP Morgan upgrades Verizon, says hefty dividend and 5G plans will boost shares

J.P. Morgan upgrades Verizon to overweight from neutral and holds its price target steady based on a solid dividend and upcoming 5G clar...

Pedestrians walk by a Verizon Wireless store on January 22, 2015 in San Francisco, California.
  • J.P. Morgan upgrades Verizon to overweight from neutral and holds its price target steady based on a solid dividend and upcoming 5G clarity.
  • "Verizon seems to be the one carrier that is heads down, executing on the business," analyst Philip Cusick wrote Friday.
  • Cusick added that Verizon has no plan to establish its own video streaming platform but it plans to announce a partnership soon.
    Getty Images
    Pedestrians walk by a Verizon Wireless store on January 22, 2015 in San Francisco, California.
    Verizon Communications shares should rise this year as a healthy dividend yield lures investors ahead of clarity on its path for 5G wireless, according to J.P. Morgan.
    The firm raised its rating on the company's shares to overweight from neutral, foreseeing a better competitive climate over the next 12 months.
    "Verizon seems to be the one carrier that is heads down, executing on the business, and could see its share improve commensurately," analyst Philip Cusick wrote Friday. "We have an increased level of confidence that revenue can stabilize and potentially start to grow. Given the potential issues and distractions of its wireless competitors, we are less negative on the overall wireless industry."
    The J.P. Morgan team – which recently held a meeting with Verizonchief executive Lowell McAdam – said the company could introduce a number of mobile 5G handsets in 2019. The long-term goal focuses on developing industrial applications, such as smart cities, connected cars and Internet of Things.
    The 5 percent dividend yield on Verizon shares should also attract investors, the analyst said, despite the 10-year Treasury note yield's recent move toward 3 percent.
    "If rates continue higher, Verizon with a 5 percent yield could struggle. We would balance this though with the defensive nature of the business, its 66 percent payout ratio and high dividend yield, and declining leverage," Cusick wrote. "We believe that from this price, when including the dividend, Verizon shares should outperform in a flat to falling market."
    The analyst held his 12-month price target steady at $58, implying 22 percent upside over the next year. Verizon's stock is down 10 percent since January, though shares were up nearly 1.5 percent in premarket trading Friday.
    He also noted CEO McAdam's lukewarm attitude toward buying or merging with media companies, saying that Verizon has no plan to establish its own video streaming platform but that it plans to announce a partnership with an existing provider later this month.
    "The company also downplayed interest in buying cable or large spectrum assets, though commenting that each could make sense at the right price," Cusick added. "Management is comfortable with the company's asset portfolio, making us less worried about the potential distraction of a big media, cable, or spectrum deal."
    Wall Street has long speculated on a Verizon deal, theorizing that a tie-up with a large media conglomerate like Comcast could be financially sound given rampant consolidation in the media and telecommunications industries.
    Other analysts, like Citigroup's Jason Bazinet, have encouraged such a merger, arguing that the tip-up could boost revenue at the combined company.
    Telecom giant AT&T and media giant Time Warner are waiting on regulatory approval for their $85 billion combination, which would marry video content with delivery on mobile devices.
Wade Green - Financial Analyst
Name

Business,7,Cryptocurrencies,2,Economy,16,Forex Market,3,Stocks,7,US Markets,1,
ltr
item
Financial Times: JP Morgan upgrades Verizon, says hefty dividend and 5G plans will boost shares
JP Morgan upgrades Verizon, says hefty dividend and 5G plans will boost shares
https://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2016/06/23/103739294-GettyImages-461977704.530x298.jpg?v=1466697266
Financial Times
https://www.usafinance.org/2018/05/jp-morgan-upgrades-verizon-says-hefty.html
https://www.usafinance.org/
https://www.usafinance.org/
https://www.usafinance.org/2018/05/jp-morgan-upgrades-verizon-says-hefty.html
true
3986571483283915381
UTF-8
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy