FBR Capital Maintains a 'Market Perform' on Verizon Communications (VZ); 1Q11 Review: Results Miss Expectations; Shares Priced for Perfection
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Price: $39.14 -0.89%
Rating Summary:
18 Buy, 30 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
18 Buy, 30 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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FBR Capital maintains a 'Market Perform' on Verizon Communications (NYSE: VZ), PT $34.
FBR analyst says, "Verizon is on the right strategic path, but we believe that the stock is currently priced for perfection and further upside is limited. Near-term investor focus is on iPhone sales and the T/T-Mobile merger (where we remain bearish), but we are also focused on other structural issues. Specifically, we see significantly higher relative wireline costs to achieve labor cost savings. We believe Verizon should consider utilizing the LTE network to progressively turn down its competitively disadvantaged, high-cost, DSL network to drive greater wireline margin expansion over the medium term. We see higher-than-expected wireline capex spending in FY11 and FY12 to help drive Verizon into a stronger strategic position in the managed-services space, which may concern investors. We believe Verizon is spending more than expected capex to increase 3G capacity to meet increased data demand, as well as replacing voice carriers with data carriers, which could potentially damage VZW's premium brand."
For more ratings news on Verizon Communications click here and for the rating history of Verizon Communications click here.
Shares of Verizon Communications closed at $36.91 yesterday.
FBR analyst says, "Verizon is on the right strategic path, but we believe that the stock is currently priced for perfection and further upside is limited. Near-term investor focus is on iPhone sales and the T/T-Mobile merger (where we remain bearish), but we are also focused on other structural issues. Specifically, we see significantly higher relative wireline costs to achieve labor cost savings. We believe Verizon should consider utilizing the LTE network to progressively turn down its competitively disadvantaged, high-cost, DSL network to drive greater wireline margin expansion over the medium term. We see higher-than-expected wireline capex spending in FY11 and FY12 to help drive Verizon into a stronger strategic position in the managed-services space, which may concern investors. We believe Verizon is spending more than expected capex to increase 3G capacity to meet increased data demand, as well as replacing voice carriers with data carriers, which could potentially damage VZW's premium brand."
For more ratings news on Verizon Communications click here and for the rating history of Verizon Communications click here.
Shares of Verizon Communications closed at $36.91 yesterday.
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