Evercore ISI Upgrades Verizon Communications (VZ) to Outperform, New Top Pick Across Wireless

Evercore ISI analyst Vijay Jayant upgraded Verizon Communications (NYSE: VZ) from Outperform to Outperform with a price target of $48.00 (from $44.00).

The analyst comments "VZ shares have outperformed the broader market meaningfully this year (+11% vs. -10% for the S&P 500 incl. dividends) as sentiment has benefited from a rotation into the wireless sector given its defensive characteristics, domestic skew, and relatively limited exposure to tariffs. However, the stock continues to lag against peers T/TMUS (+19%/+16% absolute returns YTD) on top of multiple years of relative underperformance. T has been somewhat of a turnaround story aided by consistent execution and TMUS has benefited from its strong growth outlook. VZ on the other hand has been forced to operate on a tightrope as its industry-leading position in postpaid phone subscribers and premium price points have generally called for a more defensive posture in a competitive marketplace. That said, management has executed well towards improvements on postpaid subscriber trends at Consumer, showcased continued momentum across Business wireless customers, and is consistently hitting its broadband subscriber targets. At this point, we view VZ’s relative underperformance as too punitive and don’t believe shares are getting enough credit for the resiliency of the wireless service revenue growth outlook, fiber efforts and the strategic/financial upside from the pending Frontier acquisition, and the attractive pro forma financial profile which should support buybacks and $5bn a year of excess capacity starting in 2027 (if not sooner). To be clear, “defensive” doesn’t mean that telecom is immune to broader pressures, and there’s been increasing evidence of a deceleration to wireless industry growth and elevated competition even ahead of a macro slowdown. However, given the extent of uncertainty and downside risk across the overall market, we believe wireless names will continue to fare well. VZ is now our top pick across wireless and is our top Value idea. We’re upgrading shares from In Line to Outperform and raising our PT by $4 to $48 implying 6.5x EV/EBITDA and 11.7x P/FCF (or 9.7x when including net ABS proceeds) on our 2026 estimates vs. T at 6.6x/10.8x and TMUS at 9.4x/15.5x."

For an analyst ratings summary and ratings history on Verizon Communications click here. For more ratings news on Verizon Communications click here.

Shares of Verizon Communications closed at $42.92 yesterday.

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