Nomura Securities Positive on Verizon's (VZ) Vodafone Prospects

Nomura Securities analyst Mike McCormack is positive on the prospects of Verizon Communications (NYSE: VZ) resolving its relationship with Vodafone in 2013, as was reported on Tuesday.

"We continue to see material accretion to Verizon by taking full control of Wireless. Assuming a 7.5x EV/EBITDA multiple, and funding the $111bn deal with 50% Verizon equity, we estimate Verizon’s 2013 EPS and FCF per share would rise 19% and 15%, respectively," McCormack said. "Unwinding the JV in one step continues to seem daunting, with proforma leverage at 2.4x net debt/EBITDA, to say nothing of issuing $53bn in gross debt. The Vodafone tax liability continues to loom over the discussions. The press report references a tax-free transaction method, but Vodafone would still owe taxes when selling the Verizon shares it would receive. FY13E EPS at $2.77."

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 $47.69 yesterday.

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