Citadel Securities Downgrades Verizon Communications (VZ) to Reduce; Smartphone Trends Unlikely to Meet High Expectations

Citadel Securities downgraded Verizon Communications (NYSE: VZ) from Neutral to Reduce. PT lowered $1 to $33.

Citadel analyst says, "We believe Verizon's shares, now trading at more than 14x 2012 EPS, are discounting meaningful upside to consensus estimates. The bull thesis appears to be that rapidly rising smartphone penetration will drive significant ARPU expansion, boosting 2012 earnings to well beyond the current $2.63 consensus estimate. In our view, such upside is unlikely as we believe Verizon's smartphone penetration and ARPU trajectory will both come in lower than investors expect. As it becomes evident that these targets are likely to be missed, we expect the shares to underperform."

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 $37.56 yesterday.

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